The largest component of consumption spending is spending on nondurable goods

If a Japanese company sells 200 VCRs to a French company and uses the money to buy U.S. government bonds, the Japanese merchandise trade balance ________, and the Japanese financial account balance ________

A) rises; rises B) rises; falls C) falls; falls D) falls; rises

If a good is considered a normal good, the demand curve will shift ________ when income increases because ________

A) right; the income and substitution effects move in the same direction. B) right; the income and substitution effects move in the opposite direction. C) left; the income and substitution effects move in the same direction. D) left; the income and substitution effects move in the opposite direction.