Refer to the above figure. The figure represents the consumption function for a consumer. Point D represents

The price effect is equal to the

A) substitution effect. B) substitution effect plus the income effect. C) marginal rate of substitution minus relative prices. D) substitution effect minus the income effect.

Other things equal, if foreign holdings of U.S. dollars decrease,

A) the balance on the U.S. current account will decrease. B) the balance on the U.S. financial account will decrease. C) the balance on the U.S. capital account will decrease. D) the U.S. balance of payments will decrease.