Under a fixed exchange rate regime, if the domestic currency is initially ________, that is, ________ par, the central bank must intervene to sell the domestic currency by purchasing foreign assets

Which of the following is correct?

a. Current account surplus + capital account surplus = 1 b. Current account surplus ? capital account surplus = 0 c. Current account surplus + capital account surplus = 0 d. Current account surplus ? capital account surplus = 1

Gross fiscal expenditure in a country increased by $100,000 during a certain year. If the marginal propensity to consume is 0.8, then real GDP in this country has increased by:

a. $400,000. b. $800,000. c. $200,000. d. $500,000.