According to the open-economy macroeconomic model, a decrease in the U.S. government budget deficit increases U.S. net capital outflow, causes the real exchange rate of the dollar to depreciate, and increases U.S. net exports
a. True
b. False
Indicate whether the statement is true or false
True
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Governments may prefer an inflation tax to some other type of tax because the inflation tax
a. is easier to impose. b. reduces inflation. c. falls mainly on high-income individuals. d. reduces the real cost of government expenditure.
A factor that might have contributed to the weakening of the U.S. economy in 2007-2009 was
A. the impending expiration of the Bush Tax Cuts of 2003. B. rising levels of federal government spending. C. historically-low interest rates. D. rapid growth of the money stock.
A union requirement that a truck driver has to be hired to work in a train station would be an example of
A) work expansion. B) featherbedding. C) work requirements. D) work stabilization.