An increase in a small open economy's government budget deficit that reduces national saving and the current account balance causes an
A. increase in exports.
B. increase in absorption.
C. increase in desired saving.
D. increase in the world real interest rate.
Answer: B
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José is putting money for college in a savings account. The bank then makes this money available to business borrowers. In essence:
a) José is supplying loanable funds for business investment. b) José is demanding loanable funds. c) The interest rates that businesses pay are independent of the actions of suppliers of funds, such as José. d) Financial markets are not performing the role of an intermediary.
Lagging variables are aggregate economic variables that
A) reach a peak after leading variables but before coincident variables reach a peak. B) reach a peak after coincident variables reach a peak. C) reach a peak two or more years after aggregate economic activity reaches a peak. D) are insensitive to business cycles.