Refer to Figure 29-1. Suppose that the U.S. government deficit decreases, causing interest rates in the United States to fall relative to those in the European Union. Assuming all else remains constant, how would this be represented?
A) Demand would increase and the economy moves from A to B.
B) Demand would decrease and the economy moves from B to A.
C) Supply would increase, demand would increase and the economy moves from D to A to B.
D) Supply would decrease, demand would increase and the economy moves from A to D to C.
B
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Which of the following is TRUE about how trade deficits and government budget deficits are related?
A) The government budget deficit leads to higher interest rates that will lead to a trade deficit. B) The government budget deficit leads to lower interest rates that will lead to a lower trade deficit. C) The trade deficit leads to a reduction in investment that leads to a government budget deficit. D) The trade deficit leads to a decline in imports relative to exports that leads to a government budget deficit.
Product differentiation involves making a product that is
A) slightly different from the products of competing firms. B) no different than the products of competing firms. C) very different from the products of competing firms. D) completely different from the products of competing firms. E) cheaper than the products of competing firms.
The Clayton Act of 1936 outlawed price discrimination that reduced competition
Indicate whether the statement is true or false
If Robin has an absolute advantage in both gardening and baking when compared to Robert, then
a. Robin cannot benefit by trading with Robert b. Robin can benefit by specializing in gardening if Robert specializes in baking c. Robin can benefit by specializing in baking if Robert specializes in gardening d. Robin and Robert may benefit from trading, but there is insufficient information to determine who should specialize in what e. neither Robin nor Robert can benefit from trading with the other