When a deadweight loss occurs in a market, we can be certain that

Which of the following is TRUE regarding business cycles?

I. Cycles are predictable. II. In each cycle, a peak follows an expansion. III. Potential GDP fluctuates around real GDP. A) I and II B) I and III C) II and III D) II only

A large country imposes capital controls that prohibit foreign borrowing and lending by domestic residents. The country is currently running a financial account surplus. The imposition of the capital controls will cause

A) net exports to decrease. B) real domestic interest rates to rise. C) real world interest rates to rise. D) desired national saving to fall.