An increase in the inflation rate of one country relative to another country will probably cause
A) an increase in exports for the inflating country.
B) a balance of trade deficit for the inflating country.
C) a current account surplus for the inflating country.
D) an increase in the amount of official reserves held by the inflating country's central bank.
Answer: B
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A bowed outward production possibilities curve occurs when
A) opportunity costs are constant. B) resources are not scarce. C) additional units of output of one good necessitate greater reductions in the other good. D) there are shortages in the goods being produced.
Which of the following is an example of a horizontal merger?
a. the consolidation of marketing, processing and purchasing departments by Armour Meat Company b. the purchase of E.C. Knight Company by American Sugar Refining Company c. the purchase of Colorado silver mines by the Tiffany Jewelry Company d. Federal Steel Company's alliance with American Bridge Company
Contractionary fiscal policy is deliberate government action to influence aggregate demand and the level of real GDP through:
A. expanding and contracting the money supply. B. encouraging business to expand or contract investment. C. regulating net exports. D. decreasing government spending or increasing taxes.
Explain what is necessary if a business is to earn economic profits.
What will be an ideal response?