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Curbing government spending has been demonstrated to raise the value of a country's

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Curbing government spending has been demonstrated to raise the value of a country's currency over time. However, many economists no longer recommend this policy. A currency of lesser value causes a country's exports to be more competitive in the international market, encouraging domestic industries and making the economy more attractive to foreign investment. The statements above most strongly support which of the following inferences?
(A) Limited government spending can also lead to a reduction in the national deficit.
(B) Curbing government spending can make a country's exports less competitive.
(C) Many economists now recommend higher levels of government spending.
 (D) An increase in the value of a currency will result in reduced government spending.
(E) Competitive exports indicate a weak currency

1 Answer

Payoj Kissan
option b is the right answer,since here is the scope is FDI and export and the word can make it more meaningful than option d which which is a direct statement.
answered Jun 21, 2015 by Associate (151 points)
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