Other things remaining constant, higher trade deficits in the U.S. will lead to:
a. U.S citizens buying greater foreign securities
b. an increase in domestic savings in the U.S.
c. a decrease in the demand for U.S. dollars.
d. an increase in funds from abroad.
e. an increase in the standard of living of the U.S residents.
d
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Which of the following is true?
A) MSC = MC + Marginal external cost B) MC = Marginal external cost - MSC C) MC = Marginal external benefit + MSC D) MSC = Marginal external cost + marginal external benefit E) MSC = Marginal external cost - marginal external benefit
Inflation targets can increase the central bank's flexibility in responding to declines in aggregate spending
Declines in aggregate ________ that cause the inflation rate to fall below the floor of the target range will automatically stimulate the central bank to ________ monetary policy without fearing that this action will trigger a rise in inflation expectations. A) demand: tighten B) demand; loosen C) supply; tighten D) supply; loosen