Which of the following statements best describes the budget deficit and trade deficit in the 1980s?
a. In the mid-1980s, the considerable increase in government borrowing was matched by an inflow of foreign investment capital, so the government budget deficit and the trade deficit moved together.
b. In the mid-1980s, the considerable increase in government borrowing was offset by an outflow of foreign investment capital, so the government budget deficit and the trade deficit moved in different directions.
c. In the mid-1980s, the considerable increase in government borrowing was matched by an inflow of foreign investment capital, so the government budget deficit was reduced while the trade deficit increased.
d. In the mid-1980s, the considerable increase in government borrowing was matched by an inflow of foreign investment capital, so the government budget deficit increased while the trade deficit was reduced.
a. In the mid-1980s, the considerable increase in government borrowing was matched by an inflow of foreign investment capital, so the government budget deficit and the trade deficit moved together.
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As the Federal Reserve ________ bonds, interest rates rise and the price of bonds ________
A) sells; falls B) buys; rises C) sells; rises D) buys; falls
What is the aggregate demand multiplier and why does it occur?
What will be an ideal response?
In the presence of purchasing-power parity, if one dollar exchanges for two British pounds and if a VCR costs $400 in the United States, then in Great Britain the VCR should cost
a. 200 pounds b. 400 pounds c. 600 pounds d. 800 pounds
Tijuana, Mexico is across the border from San Diego, California. It has become a world-leading producer and exporter of television sets and computer monitors, which it assembles in modern factories owned by multinational consumer electronics firms such as Sony. Initially, these electronics were produced in the industrialized countries of their parent companies, and after several years, the
production moved to Tijuana. This is an example of A) the product cycle. B) intraindustry trade. C) the specific factors model. D) the magnification effect.