In the above figure, Reggie's budget line rotates outward from BL1 to BL2. He initially consumes at point A. If his new consumption bundle is at point B, this implies that kiwi fruit and mangoes are

Based on economic criteria, a nation should choose a fixed exchange rate if:

A) the monetary authorities are capable of handling shocks. B) the net benefits of fixing versus floating are positive. C) the net benefits of fixing versus floating are negative. D) there is a liberal political agenda that restricts government authority over capital flows.

When future labor income falls in a large open economy, it causes the current account to ________ and investment to ________

A) fall; rise B) rise; remain unchanged C) fall; fall D) rise; rise