Under a floating exchange-rate system, an increase in the international demand for electronic appliances manufactured in Japan will result in
A. a reduction of international reserves held by the central bank of Japan.
B. an appreciation of the yen vis-à-vis other currencies.
C. deflation in the Japanese economy.
D. an increase in Japan's trade deficit with other countries.
Answer: B
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The crowding-out effect is the tendency for
A) higher government budget deficits to increase total savings. B) lower private saving to decrease investment. C) higher government budget deficits to decrease investment. D) higher private savings to decrease government budget surpluses. E) lower private saving to increase the budget deficit.
GDP is: a. the value of all final goods and services produced domestically within a given period of time
b. the value of all final good and services produced anywhere in the world by a nation's firms within a given period of time. c. the value of all final goods and services produced by a government within a given period of time. d. the sum of all currency and coins in circulation.