A change in autonomous spending leads to an even greater change in total spending through the multiplier process

Suppose the United States initially has a trade deficit. Then U.S. firms increase their imports from Canada, financing that increase by borrowing from Canada

The current account deficit is now ________ and the capital and financial account surplus is now ________. A) larger; larger B) larger; smaller C) smaller; larger D) smaller; smaller

A student wrote: "A subsidy raises marginal social benefit above marginal social cost and eliminates the deadweight loss from underproduction." If you were the instructor, how would you correct this statement?

What will be an ideal response?