When the price of a normal good rises, the income effect results in ________ in the quantity demanded and the substitution effect results in ________ in the quantity demanded

Which of the following is TRUE of the current account balance?

A) Monetary expansion has no effect on the current account balance. B) Monetary expansion decreases the current account balance. C) Fiscal expansion increases the current account balance. D) Fiscal expansion has no effect on the current account balance. E) Monetary expansion increases the current account balance.

Figure 10-11

In , which of the following would most likely cause the movement from point E₁ to point E₂?
a.
an increase in the expected inflation rate
b.
a decrease in the expected inflation rate
c.
a major technological advance
d.
a temporary reduction in oil prices