Economic theory shows that the current account deficit is always equal to the capital account surplus. This means that
a. the federal budget must always be in balance.
b. when a country exports more goods and services than it imports, it also imports assets equal to the difference.
c. current account deficits should be avoided.
d. trade deficits tend to be eliminated automatically.
b
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According to the IS curve, the tax multiplier is always ________
A) larger in absolute value than the expenditure multiplier B) equal to the expenditure multiplier C) smaller in absolute value than the expenditure multiplier D) equal to one
Which of the following is not a drawback of forecasting using the compound growth rate method?
A) only considers first and last observations B) considers only equal absolute changes C) disregards fluctuations between the original and terminal observations D) does not consider any trends in the data