________ increases potential GDP

At higher rates of interest

A) businesses demand more investment because there are more funds available to invest. B) businesses demand more investment because future profitability is likely to be greater. C) households save more because they get a greater return on their savings. D) households save less because it is more expensive to save.

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.