When the U.S. current account has a deficit, international payments from the United States ________ U.S. international receipts
To cover the current account deficit, there must be a ________ in the combined capital and financial account and official settlements account.
A) equal; surplus
B) are less than; deficit
C) exceed; surplus
D) are less than; surplus
E) exceed; deficit
C
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A combination of an increase in the discount rate and an open market sale of government securities by the Fed would: a. increase the money supply
b. decrease the money supply. c. leave the money supply unchanged. d. have an indeterminate effect on the money supply.
Suppose that on average each dollar in 1988 would buy what could have been purchased for 25 cents in 1967 (which you assume is the base year for the CPI). What is the CPI in 1988?
A. 100 B. 200 C. 400 D. 500
Moral hazard occurs when:
a. Individuals and institutions do not bear the full cost of their own mistakes. b. General social decay leads to unethical business decisions. c. The actions of one (or a few) result cause harm to others, when the same would not occur if the actions were by many. d. General social decay leads to unethical business decisions. e. All of the above are examples of moral hazard.
According to purchasing-power parity which of the following would happen if a country raised its money supply growth rate?
a. its nominal exchange rate would fall b. its real exchange rate would fall c. its real net exports would rise d. All of the above would happen.