The U.S. current account deficit improved slightly from 2007 to 2010 because
A) spending on imports fell due to an overall fall in consumption.
B) state, local, and federal government budget deficits increased.
C) worldwide economic growth spurred U.S. exports.
D) capital controls restricted capital inflow.
A
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Explain the law of one price and the theory of purchasing power parity. Why doesn't purchasing power parity explain all exchange rate movements in the short run? What factors determine long-run exchange rates?
What will be an ideal response?
Private saving equals:
a. Y - C - T + TR b. Y + C + T + TR c. Y + C + T - TR d. Y + C - T - TR
In an open economy, the government deficit is 600 and saving exceeds investment by 500, so in equilibrium the trade deficit (IM? X) must be
A. 100 B. 200 C. 300 D. 700
Which of the following is a characteristic of an oligopolistic industry? a. Each firm faces many competitors who sell identical products. b. Many firms compete to sell similar, but differentiated, products. c. Firms face no competitors
d. A few large firms have all or most of the sales in an industry.