Refer to Figure 5-6. What is the market equilibrium output level?

When a U.S. investor buys a bond issued in a foreign country

A) the balance on the financial account decreases. B) the balance on the capital account decreases. C) the balance of trade decreases. D) the balance on the current account decreases.

How would the real exchange rate need to change to get aggregate expenditure to increase?

A. Increase B. Decrease C. Remain constant D. Exchanges rates don’t generally affect aggregate expenditure.