If the marginal benefits are greater than the marginal cost of an activity, then society is overallocating resources to this activity.

If a nation's current account is -$200 billion and its financial account (excluding its official settlements balance) is $175 billion, how much is its official settlements balance?

A) -$25 billion B) +$25 billion C) -$375 billion D) +$ 375 billion

One of the chief advantages of exchange rate pegging is that ________

A) a country is able to pursue an independent monetary policy over the course of the business cycle B) it can be an effective means of reducing inflation C) the currency can be used to promote export growth D) it allows the monetary authorities to actively respond to the problems of inflation and unemployment