If the balance of the current account in the United States is -$900 billion, which of the following is most likely to be true?
A) The balance on the financial account is positive. B) Net foreign investment is positive.
C) The trade balance is positive. D) The balance on the capital account is negative.
A
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Refer to Table 5.1. Andrea has a comparative advantage in the production of
A) bracelets. B) tiaras. C) both products. D) neither product.
An increase in interest rates will cause investment to
A) increase. B) decrease. C) not change. D) move erratically, depending on the interest rate effect on saving.
Suppose that real GDP falls to 2 percent below potential GDP. Then, according to the Taylor rule, the Fed should reduce the federal funds, relative to the current rate of inflation, by:
A. ½ percentage point. B. 1 percentage point. C. 2 percentage points. D. 4 percentage points.
If the annual interest rate printed on the face of a bond is 25 percent, the face value of the bond is $1,000, and the current market price of the bond is $700, what is the current yield on the bond?
A. 25.5 percent. B. 20.5 percent. C. 25.0 percent. D. 35.7 percent.