If net foreign investment is negative, which of the following must be true?
A) Net exports are positive.
B) Domestic investment must be greater than national saving.
C) Private saving is greater than public saving.
D) Capital outflows are greater than capital inflows.
B
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What happens to the demand for a good if a complement's price increases?
A) The demand increases and the demand curve shifts rightward. B) The demand decreases and the demand curve shifts rightward. C) The demand increases and the demand curve shifts leftward. D) The demand decreases and the demand curve shifts leftward. E) There is no impact on demand for the good and the demand curve does not shift.
Assume individuals consider only the long run effects of changes in future macro variables when forming expectations of future output and future interest rates. Suppose individuals expect future government spending to decrease. Given this information, individuals will expect
A) a reduction in the expected future interest rate and no change in expected future output. B) a reduction in the expected future interest rate and an increase in expected future output. C) a reduction in the expected future interest rate and a reduction in expected future output. D) a reduction in the expected future interest rate and an ambiguous effect on expected future output.