For a major country with extensive capital flows, what is the effect of a decrease in interest rates?
a. a currency depreciation and increased net exports
b. a currency depreciation and reduced net exports
c. a currency appreciation and increased net exports
d. a currency appreciation and reduced net exports
a
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The capital and financial account balance is equal to
A) the value of exports of U.S. capital goods minus the value of imports of capital goods into the United States. B) exports minus imports. C) foreign assets owned by the United States minus U.S. assets owned by foreigners. D) U.S. investment abroad minus foreign investment in the United States. E) foreign investment in the United States minus U.S. investment abroad.
Alice and Gene work in the mailroom, sorting and delivering mail. In order for them to benefit from specialization and trade, Alice must
A) be able to both sort and deliver faster than Gene. B) be equally productive in both sorting and delivering. C) have a comparative advantage in both sorting and delivering. D) have a comparative advantage in one task and Gene must have a comparative advantage in the other task. E) be equally productive as Gene in both sorting and delivering.