In an open economy, desired domestic lending
A) must equal desired domestic borrowing.
B) must equal desired domestic borrowing plus the amount of international lending.
C) is always greater than desired domestic borrowing.
D) is always less than desired domestic borrowing.
B
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Suppose that the Australian economy initially uses 50 billion hours of labor to produce $5 trillion of real GDP. If 50 billion more hours are employed and Australia's real GDP increases by $4 trillion more,
A) Australia's production function exhibits diminishing returns. B) Australia's production function exhibits increasing returns. C) Australia has an Okun Wedge of $1 trillion. D) Australia has positive Lucas Wedge. E) Australia's production possibility frontier has a positive slope.
Which of the following is a normative statement?
A) The price of candy bars is $1.25 each. B) Candy bars are more expensive than newspapers. C) You should eat less candy. D) Popcorn and candy are sold in movie theaters.