How might a U.S. federal budget surplus affect the balance of trade? (Assume exchange rates are stated in terms of foreign currency per U.S. dollar.)
A) A federal budget surplus raises interest rates, which raises exchange rates, and increases the balance of trade.
B) A federal budget surplus reduces interest rates, which raises exchange rates, and reduces the balance of trade.
C) A federal budget surplus raises interest rates, which raises exchange rates, and reduces the balance of trade.
D) A federal budget surplus reduces interest rates, which reduces exchange rates and increases the balance of trade.
D
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List and explain the factors that can increase labor productivity
What will be an ideal response?
Pete consumes two goods, rice and fish. When the price of fish rises, he consumes less fish. When the price of rice rises, he consumes more rice. For Pete,
a. fish is not a Giffen good but rice is. b. rice is not a Giffen good but fish is. c. both fish and rice are normal goods. d. both fish and rice are Giffen goods.
Because the open-economy macroeconomic model focuses on the long run, it is assumed that
a. GDP, but not the price level is given. b. the price level, but not GDP is given. c. both the price level and GDP are given. d. the price level and GDP are variables to be determined by the model.
Table 7.2GDP for Newland?Nominal GDP(in billions of dollars)GDP deflatorCPI2001$5,900120.1128.320026,300123.0131.720036,800126.3136.5Based on Table 7.2, the rate of inflation between 2001 and 2002 using the CPI was
A. 2.65 percent. B. 3.40 percent. C. 2.58 percent. D. 2.02 percent.