If the United States borrows a large amount of money from other countries to pay for a trade deficit
A. this is not necessarily a problem if the economy is growing fast enough to have future income to pay back the accumulated debt.
B. this will hurt the U.S. economy unless the United States is able to pay off the debt by increasing manufacturing exports.
C. this will necessarily slow the U.S. growth rate, compared to a situation in which the United States has a trade surplus.
D. American firms will have to repay the debt with shares of stock or real estate, which will put American firms at a disadvantage compared to foreign firms.
Answer: A
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A. the operation of banks and the stock market. B. business management. C. how resources are allocated among alternative goals. D. the right time to start a business.
The growth rate in potential GDP is equal to the growth rate in the population.
Answer the following statement true (T) or false (F)
If the quantity of bank reserves held at the Fed increases, ________
A) the real interest rate increases B) bank deposits decrease C) the number of loans issued by banks decrease D) inflation increases
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A. nonexcludable; excludable B. excludable; nonexcludable C. rival; nonrival D. nonrival; nonexcludable