If there are no interventions by finance ministers or control banks in the international market, then
A) the current account and the capital account must sum to zero.
B) the current account will be greater than the financial market.
C) the capital market will be greater than the current account.
D) the capital market will equal the current account.
Answer: A
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Looking at the U.S. personal saving rate over the last sixty years, we can say that ________
A) it has always been low B) Americans used to spend a lot more than they have in recent years C) Americans used to save a lot more than they have in recent years D) it has always been fairly high E) Americans spend more when concerned about their future earnings
The unbalanced development strategy for economic development requires little government intervention
Indicate whether the statement is true or false
A Japanese automobile manufacturer building an auto plant in the United States creates a
a. supply of dollars and demand for yen in the foreign exchange market. b. demand for dollars and a supply of yen in the foreign exchange market. c. demand for both dollars and yen in the foreign exchange market. d. supply of both dollars and yen in the foreign exchange market.
Refer to the graph below. Assume that the economy is initially at full-employment equilibrium at point A. If there is cost-push inflation in this economy and the government pursues an expansionary fiscal policy, then in the long run the:
A. Price level will rise from P1 to P2 and real output will be Q2
B. Price level will rise from P1 to P3 and real output will be Q1
C. Price level will rise from P1 to P2 and real output will be Q3
D. Price level will be P1 and real output will be Q1