Figure 4.4 illustrates the supply of tacos. If the government offered a subsidy to Mexican restaurants for each taco they produce, this would most likely cause a movement from

Which of the following statements about the balance of payments accounts is CORRECT?

A) The current account must be greater than the capital and financial account. B) The sum of all three accounts is always zero. C) The official settlements account is typically larger than both the capital and financial account and the current account. D) Typically the capital and financial account is near zero because it equals the difference between the current account and the official settlements account.

Regarding fiscal policy, the new classical economists

a. are in favor of stability. b. attempt to avoid excessive and inflationary stimulus. c. want to avoid erratic government deficit spending. d. All of the above e. None of the above