A common response to stop a depreciation of a currency is to use contractionary monetary policy, which could lead to a recession

Which of the following statements has usually held TRUE about the relationship between the trade deficits and government budget deficits?

A) There is a negative relationship between trade deficits and budget deficits. B) There is a positive relationship between trade deficits and budget deficits. C) There is no relationship between trade deficits and budget deficits. D) A relationship exists only when there is a balanced budget.

Clark Industries currently spends 5 percent of its sales on advertising. Suppose that the elasticity of advertising for Clark is 0.25. Determine the optimal profit margin over price (P ? MC)/P.

A. 15 percent. B. 25 percent. C. 20 percent. D. None of the answers is correct.