Looking at the U.S. balance of payments for the last two decades, how have the current account and the capital and financial account changed?
What will be an ideal response?
Since the early 1980s, the U.S. current account has been negative and sometimes quite large. The U.S. capital and financial account has more or less mirrored the current account, only it has been positive rather than negative. Thus when the current account deficit is small, the capital and financial account surplus is small and when the current account deficit is large, the capital and financial account surplus is large.
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Suppose the economy is at a short-run equilibrium GDP that lies below potential GDP. Which of the following will occur because of the automatic mechanism adjusting the economy back to potential GDP?
A) Output will decrease. B) Short-run aggregate supply will shift to the right. C) Unemployment will rise. D) Prices will increase.
What factors have served to open up world markets to increased international trade?
a. improvements in communications and transportation b. increased tariffs and legislation protecting industries c. an emphasis on regional markets and local sourcing d. climate change and rising environmental awareness
The own-price elasticity for cherries at the farm level is —0.60. Because of the recent freeze in Washington, cherry production will fall by 12 percent. Cherry prices are likely to
A) Remain the same. B) Rise by 20%. C) Fall by 20%. D) Can't tell; insufficient information.
A display of a game in a tree diagram with nodes for every move by the players is a(n)
A. part of strategic moves. B. representation of Prisoner's Dilemma. C. extensive-form game. D. simultaneous-move game.