What would be the effect on the U.S. trade deficit if China and Japan ran a contractionary fiscal policy? Draw the schematics to show the effect of expansionary monetary policy on the trade deficit....

What would be the effect on the U.S. trade deficit if China and Japan ran a contractionary fiscal policy? Draw the schematics to show the effect of expansionary monetary policy on the trade deficit. You observe that over the past decade a country’s trade deficit has risen. a. What monetary or fiscal policies might have led to such a result? b. You also observe that interest rates have steadily risen along with a rise in the exchange rate. What policies would lead to this result? c. Could another explanation be that people in other countries wanted to hold lots of that country’s debt?