Which of the following is TRUE of the relationship between U.S. trade deficits and federal government budget deficits?
A) Increases in the budget deficit are always associated with reductions in the trade deficit.
B) Increases in the budget deficit are always associated with increases in the trade deficit.
C) Increases in the budget deficit tend to be associated with increases in the trade deficit.
D) Increases in the budget deficit tend to be associated with reductions in the trade deficit.
C
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One of the problems in conducting a duration gap analysis is that the duration gap is calculated assuming that interest rates for all maturities are the same. That means that the yield curve is
A) flat. B) slightly upward sloping. C) steeply upward sloping. D) downward sloping.
Public policies designed to increase labor productivity do not include
a. subsidies for higher education. b. tax breaks for job retraining. c. tax breaks on corporate dividends. d. public education.
The present value of $100 to be received one year from now
A) is $100. B) is $110. C) is $90. D) cannot be determined without knowing the interest rate.
Recall the Application about the impact tariffs have on lower income households to answer the following question(s). Economists have found that tariffs in the United States fall most heavily on lower-income consumers. In the United States, tariffs are very high on textiles, apparel items and footwear, and within these categories the highest tariffs fall on the cheapest products. In general, to protect U.S. industries, tariffs are highest on labor-intensive goods.If the tariffs on textiles, apparel items, and footwear mentioned in the Application were replaced by equivalent voluntary export restraints (VERs), who would benefit the most?
A. low-income consumers B. high-income consumers C. the U.S. government D. the foreign manufacturer