What is the effect of trade policy on demand for dollars?
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A. Describe how a contractionary monetary policy impacts a nation's international trade. Be sure to discuss the value of that nation's currency, the price of goods produced in that nation, and its trade balance. (10 points)
B. Describe the effect of expansionary economic policies on a nation's trade deficit. Be sure to consider both monetary and fiscal policy. (10 points)
C. According to the twin deficits effect, an increase in the government budget deficit will also increase that nation's trade deficit. Explain why this effect is expected to occur. (7 points)
4. The technique effect of trade A. always reinforces the composition effect of trade B. leads to more competition among firms C. causes an increase in the demand for environmental quality D. can offset the scale effect of trade