A small open economy has a current account balance of zero. A rise in the world real interest rate causes
A. a financial account surplus.
B. absorption to exceed income.
C. net borrowing from abroad.
D. a current account surplus.
Answer: D
You might also like to view...
In a liquidity trap situation: a. The Fed could not appreciably lower short term interest rates
b. If the Fed added reserves to the banking system, it would have little effect on investment. c. Traditional monetary policy would be relatively weak in its effects on aggregate demand. d. All of the above are true.
If Peter produces 3 times as much per hour as Julia, we would say that he is ______ times as productive as she is.
Fill in the blank(s) with the appropriate word(s).
The central difference between the structural stagnation hypothesis and the secular stagnation theory is that:
A. structural stagnation applied in the 1940s, and secular stagnation applies today. B. structural stagnation focuses on globalization, while secular stagnation focuses on declining investment. C. structural stagnation focuses on declining investment, while secular stagnation focuses on globalization. D. structural stagnation is a hypothesis, while secular stagnation is a theory.
If the price elasticity of supply is 0.3, supply is:
A. unaffected by price changes. B. inelastic. C. unit elastic. D. elastic.