If a country runs a trade deficit to finance increased current consumption, it will have to increase consumption in the future to pay back its borrowings.
Answer the following statement true (T) or false (F)
False
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If economic fluctuations originate on the supply side,
A. there will be no relationship between unemployment and inflation. B. real wage increases will be necessary to eliminate unemployment. C. inflation and unemployment will be negatively related. D. inflation and unemployment will be positively related.
Deadweight loss results from too few or too many resources used in a given market
a. True b. False Indicate whether the statement is true or false
The substitution effect reflects how a consumer will react to a different:
A. level of nominal income. B. marginal rate of substitution. C. level of real income. D. market rate of substitution.
Because the price effect is smaller when there are ________ firms, each firm will increase its quantity by ________ before the price effect and quantity effect are equal.
A. less; more B. similar; less C. more; more D. more; less