In the United States, the main source of fluctuations in the current account balance is
A) exports of capital.
B) net transfers.
C) international debt.
D) net exports.
E) net interest.
D
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The ECB would be unable to prevent a large banking crisis in the Eurozone because:
A) it can print money but is prohibited from lending to banks or central banks in the member states. B) crises of such proportions would require an international effort. C) deposits in banks in the Eurozone have FDIC insurance and are therefore out of the control of the ECB. D) its assets are inadequate.
If an economy has a flexible exchange rate and it chooses to issue $10 million in bonds, what will happen according to the Monetary approach?
A) It will have to allow its currency to appreciate. B) It will have to allow its currency to depreciate. C) It will have to decrease its foreign exchange reserves. D) It will have to increase its foreign exchange reserves.