A government began 2013 with a budget deficit and a trade deficit. During the year, the government changed its policy and is now running a budget surplus. If all other factors hold constant, this change in policy will cause:
A. the exchange rate to decrease and the trade deficit to increase.
B. the exchange rate to increase and the trade deficit to decrease.
C. the exchange rate and the trade deficit to decrease.
D. the exchange rate and the trade deficit to increase.
Answer: C. the exchange rate and the trade deficit to decrease.
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According to the table above what would the flows of trade be between both countries if the exchange rate were $1 = 2.5 pesos?
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A) increase; current or future taxes will decrease, making them financially better off. B) decrease; current or future taxes will decrease, making them financially better off. C) decrease; current or future taxes will increase, making them financially worse off. D) increase; current or future taxes will increase, making them financially worse off.
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______________ refers to the fraction of your medical bill that you, rather than your insurer, must cover.
A. Co-insurance B. Co-pay C. Deductible D. None of the above is correct.