If a country's current account balance is zero and the financial payments flowing in and out of the country's economy are equal, then which of the following must be a true statement?
a. It has an overall or net inflow of financial investment.
b. It is not an overall or a net investor in other countries.
c. It has an overall or net outflow of financial investment.
d. Its government is not indebted to other governments.
b. It is not an overall or a net investor in other countries.
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Persistent current account deficits in the United States
A) cause persistent declines in investment in the United States. B) will eventually cause the value of the dollar to rise. C) can be seen as a vote of confidence in the strength of the U.S. economy. D) cause U.S. investors to accumulate more foreign assets than foreign investors accumulate U.S. assets.
__________ consumption will __________ as a result of a decrease in taxes
A) Autonomous; decrease B) Autonomous; increase C) Induced; decrease D) Induced; increase
An increase in the price of good X will be accompanied by
a. a shift in the market demand curve for good X. b. a shift in the market demand curve for good Y (a substitute for good X). c. a movement along the market demand curve for good X. d. Both b and c.
A Giffen good is a good for which
a. a decrease in the price decreases the quantity demanded. b. the income effect outweighs the substitution effect. c. an increase in the price decreases the quantity demanded. d. Both a) and b) are correct.