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.
B. Describe the effect of expansionary economic policies on a nation's trade deficit. Be sure to consider both monetary and fiscal policy.
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.