Assume the government reduces government spending. What is the first round effect on the components of the balance of payments (assume low international capital mobility and fixed exchange rates; also assume that before the government action all the components were 0)?
a. Current international transactions balance and reserves account become positive; net nonreserve international
borrowing/lending balance becomes negative.
b. Current international transactions balance becomes positive; net nonreserve international borrowing/lending balance and reserves account become negative.
c. Net nonreserve international borrowing/lending balance becomes positive; current international transactions balance and reserves account becomes negative.
d. Net nonreserve international borrowing/lending balance and reserves account become positive; current international transactions balance becomes negative.
e. Reserves account becomes positive; current international transactions balance and net nonreserve international borrowing/lending balance become negative.
.B
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A firm's labor demand curve is derived from the demand for the goods and services it produces
a. True b. False
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