Assume that an increase in Costa Rica's government budget deficit reduced desired national saving by 10 million colon. Assuming Costa Rica is a small open economy, you would expect the government's action to

A) increase the current account balance by exactly 10 million colon.
B) increase the current account balance by less than 10 million colon.
C) reduce the current account balance by exactly 10 million colon.
D) reduce the current account balance by more than 10 million colon.


C

Economics

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If Ap is total autonomous planned spending, c is the marginal propensity to consume, s is the marginal propensity to save, and Y is the equilibrium income level, then induced saving is

A) Ap/Y. B) Y = Ap/s. C) sY. D) cAp.

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The amount of interest owed on a loan of $100,000 after a year at an interest rate of 3 percent is:

A. $3,000. B. $30,000. C. $103,000. D. $100,300.

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Reserves that the Fed injects into the banking system are ultimately

a. converted into loans that banks make to other banks b. distributed among different banks in the system as required reserves c. end up in just two or three banks d. ineffective at increasing money supply e. important to banks that want more customers

Economics