"Wine experts are discovering that California wines of several varieties and vintages are comparable to many of the best French wines. The result is an increased demand, here and abroad, for California wines." With regard to the U.S. balance on current account, this trend will
a. increase the U.S. deficit because of the rise in the price of California wine.
b. decrease the U.S. deficit because of increased shipments of California wines abroad.
c. decrease the demand for U.S. dollars.
d. increase the U.S. demand for euros.
B
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What will be an ideal response?
Which of the following could explain why there is an increase in potential GDP but the equilibrium level of GDP falls?
A) AD did not shift and SRAS shifted to the left. B) AD shifted to the right by less than SRAS. C) SRAS shifted to the right by more than LRAS. D) AD shifted to the right by more than SRAS.
What type of relationship exists between expected future income and consumption?
A. Negative B. Positive C. Indirect D. Constant
When the top marginal tax rates were lowered substantially during the 1980s, the inflation-adjusted income tax revenue collected from the top 1 percent of all income earners
a. declined sharply. b. remained approximately constant. c. increased substantially. d. did none of the above.