Assuming no change in the effective tax rate on capital, a decrease in the government budget deficit will reduce the current account deficit if and only if the decrease in the budget deficit
A. reduces desired national saving.
B. reduces desired national investment.
C. increases desired national saving.
D. increases desired national investment.
Answer: C
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Depository institutions do all of the following EXCEPT
A) set the required reserve ratio. B) create liquidity. C) pool risks. D) minimize the cost of obtaining funds.
If TruLite's factory workers receive an hourly wage, described by the equation; Compensation = $5.00 + .10Q, where Q is the number of light switches installed per hour, then:
A. the employee can remain completely risk-averse. B. there are no compensating differentials. C. output becomes a subjective measure of performance. D. the employee must accept risk of production variability.
Figure 5-3
In Figure 5-3, a decline in price from 3 to 1 will increase market quantity demanded by
a.
30.
b.
40.
c.
50.
d.
60.
Stagflation refers to a situation in which the economy is experiencing:
A. high economic growth and high inflation. B. low economic growth and high inflation. C. high economic growth and low inflation. D. low economic growth and low inflation.