Which of the following is true?
a. The U.S. current account deficit is a financial obligation of the federal government.
b. A nation cannot run a current account deficit over a long period.
c. A country with relatively poor (compared with other countries) domestic investment opportunities and a high saving rate will tend to run a current account deficit.
d. A country with highly attractive (compared with other countries) domestic investment opportunities and a low saving rate will tend to run a current account deficit.
D
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Which of the following might limit the money creation process to an amount less than the potential amount?
a. bank pursuit of profits b. public holding some cash c. business demand for loan d. increased use of credit cards
Suppose that income taxes are reduced by $400 billion and households increase consumption by 80% of the resulting change in disposable income. Suppose also that the multiplier is 2. What is the marginal propensity to consume?
A) 0.2 B) 0.4 C) 0.8 D) 1.6
Discount rate is the interest rate on the loans that the Fed makes to banks.
Answer the following statement true (T) or false (F)
Assuming there are no externalities, if a firm is producing at an output level where the benefits to consumers exceed the cost to the suppliers to produce it, then price
A. is less than marginal revenue. B. is greater than marginal cost. C. equals marginal cost. D. is less than marginal cost.