When foreigners purchase U.S. assets, there is an inflow of funds from abroad and this is recorded as a
A. positive item in the capital account.
B. positive item in the current account.
C. negative item in the capital account.
D. negative item in the current account.
Ans: A. positive item in the capital account.
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The traditional Keynesian approach to fiscal policy assumes that
A) an equal income distribution ensures a stable economy. B) consumers spend more when their incomes are higher. C) cutting taxes is a more effective way to stimulate the economy than is increasing government spending. D) the effect of unemployment compensation is to destabilize the economy.
The twin economic problems of the U.S. health care industry are the
A) rising health care costs and the declining quality of health care services. B) rising health care costs and the rising malpractice insurance costs. C) rising health care costs and the moral hazard problem in health care services. D) declining rate of immunization rates and the rising malpractice insurance costs.