If total spending is greater than the value of output, firms will

Assume that an increase in Costa Rica's government budget deficit reduced desired national saving by 10 million colon. Assuming Costa rice is a small open economy, you would expect the government's action to

A) increase the current account balance by exactly 10 million colon. B) increase the current account balance by less than 10 million colon. C) reduce the current account balance by exactly 10 million colon. D) reduce the current account balance by more than 10 million colon.

Suppose individuals expect that interest rates will increase in the future. Also assume that the Fed wants to prevent any change in current output. Given this goal of the Fed, the Fed should implement a policy in the current period that

A) shifts the IS curve rightward. B) shifts the IS curve leftward. C) shifts the IS curve leftward and the LM curve upward. D) shifts the LM curve upward. E) shifts the LM curve downward.