In a two-period model with production, a decrease in the world real interest rate
A) increases the current account surplus and increases real output.
B) reduces the current account surplus and increases real output.
C) increases the current account surplus and reduces real output.
D) reduces the current account surplus and reduces real output.
D
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The underground economy
A) is measured by government officials through tax returns. B) is difficult to describe but easy to measure. C) includes production that uses illegal workers who are paid less than minimum wage. D) includes mining production. E) is estimated by the government and the estimate is part of official GDP.
One important difference between the international economy of today and the economy of 100 years ago is
A) that labor is so much more mobile. B) for the first time, technological innovations have reduced the barrier of distance. C) for the first time, capital is mobile. D) that price differences in different markets have narrowed. E) the presence of international bodies such as the IMF and World Bank.
The strong demand for housing, rising housing prices, and a construction boom from 2000 to 2005 were a result of
a. market forces that were eventually cut short by the stock market crash of 2008. b. policy changes that had positive initial effects, but negative long-term effects. c. tightened mortgage lending standards that reduced the risks of obtaining a home mortgage. d. the rising interest rates of that period, which increased the demand for housing.
The GDP is the value of all final goods and services produced
A. by domestically controlled companies.
B. by domestically owned companies.
C. by citizens of the country.
D. within a nation's boundaries.