In the classical model,
a. markets do not automatically clear.
b. business demand for loanable fund exceeds business planned investment spending.
c. there is no government sector, only private consumption and planned investment.
d. businesses engage in interest-free borrowing.
e. the government's demand for funds is vertical.
E
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A U.S. grocery store chain bought $800,000 worth of Kenyan currency from a bank in Kenya. It then used these funds to buy $800,000 worth of coffee from Kenyan coffee growers. As a result of this exchange, by how much and in which direction did: A. U.S. net exports change? B. U.S. net capital outflow change?
The theory which predicts that trade occurs because of differences in the availability of factor inputs across countries and the differences in the proportions in which the inputs are used in producing different products is called
A. the Heckscher-Ohlin theory. B. the theory of comparative advantage. C. the Stolper-Samuelson theory. D. the theory of factor price equalization.