If international capital flows are not very responsive to interest rates, the initial impact of expansionary fiscal policy will
A. be totally ineffective.
B. result in a deficit in the overall balance of payments.
C. lead to a current account surplus.
D. result in a significant deterioration in the financial account.
Answer: B
You might also like to view...
Which of the following would shift the supply curve for energy drinks to the left?
A) a decrease in the number of firms that produce energy drinks B) an increase in consumer income (assuming that energy drinks are normal goods) C) a decrease in the expected future price of energy drinks D) a decrease in the price of an input used to produce energy drinks
A hyperinflation is
A) a period of extreme inflation generally greater than 50% per month. B) a period of anxiety caused by rising prices. C) an increase in output caused by higher prices. D) impossible today because of tighter regulations.
The greater the product differentiation between monopolistically competitive firms
A) the lower the barriers to entry. B) the greater the price elasticity of demand. C) the higher the average variable costs. D) the lower the price elasticity of demand.
A perfect monopoly:
A. can be a single seller or small group of firms. B. can offer a product at the lowest cost possible. C. controls 100 percent of the market for a product. D. always engages in price discrimination.