The current account balance equals the value of net exports
Indicate whether the statement is true or false
FALSE
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________ in the domestic interest rate causes the demand for domestic assets to ________ and the domestic currency to depreciate, everything else held constant
A) An increase; increase B) An increase; decrease C) A decrease; increase D) A decrease; decrease
Suppose that you are planning to buy a new cellphone. Your choice is a new Samsung phone or HTC model. Samsung phones are manufactured in Korea and HTC phones are manufactured in Taiwan. Assuming that the price of each phone is the same, will your purchase of the Samsung or the HTC affect U.S. GDP differently? a. No, both have the same impact: your purchase will increase consumption expenditures
and decrease net exports by the same amount. b. Yes. This depends upon which cellphone carrier you choose. c. No, because Samsung's production only affects Korea's GDP; and HTC's production only impacts Taiwan's GDP. d. Yes. The country from which a product is imported has different effects on U.S. GDP because it depends upon trade agreements with the countries.
The Latin term "ceteris paribus" means:
A. that if event A precedes event B, A has caused B. B. that economics deals with facts, not values. C. other things equal. D. prosperity inevitably follows recession.
Opportunistic disinflation occurs when policymakers:
A. take advantage of positive supply shocks. B. change the target inflation rate. C. are able to permanently lower inflation. D. all of the answers given are correct.