Because fiscal policy affects the quantity that the government borrows in financial capital markets, it not only affects aggregate demand, but it can also affect _____________ rates.

If interest rates in Japan rise and those in the United States do not change, there is

A) a decrease in the supply of dollars. B) an increase in the supply of dollars. C) a downward movement along the supply curve for dollars. D) None of the above answers is correct.

If a country has saving of $2 trillion and investment of $1.5 trillion, then it has

a. a trade surplus and its net capital outflow = $.5 trillion. b. a trade surplus and its net capital outflow = -$.5 trillion. c. a trade deficit and its net capital outflow = $.5 trillion. d. a trade deficit and its net capital outflow = -$.5 trillion.