In the classical model with an open economy, an increase in the trade deficit as a result of a tax cut, causes a decline in the interest rate, attracting more loanable funds from abroad

Which of the following statements is true of Black Wednesday?

A) Following Black Wednesday, the British pound became less valuable relative to the German mark. B) Currency traders who had borrowed pounds to buy German marks incurred huge losses due to Black Wednesday. C) The British government earned enormous profits by selling foreign currency reserves following Black Wednesday. D) Following Black Wednesday, the British pound became more valuable relative to the German mark.

Which of the following is not a form of capital?

a. loanable funds b. John Deere farm machinery c. sourdough used to make bread d. sourdough bread on your Thanksgiving dinner table e. sourdough bread used to make a tuna sandwich at Timpone's restaurant