Assume that an increase in Costa Rica's government budget deficit reduced desired national saving by 10 million colon. Assuming Costa Rica is a small open economy, you would expect the government's action to
A) increase the current account balance by exactly 10 million colon.
B) increase the current account balance by less than 10 million colon.
C) reduce the current account balance by exactly 10 million colon.
D) reduce the current account balance by more than 10 million colon.
C
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State and local governments finance expenditures mainly from
A) tax revenue. B) government bonds issued at the state level. C) funds provided by the federal government. D) private bank loans. E) lottery funds.
An important difference between the demand for a private good and the demand for a public good is that
A) the resources used to provide public goods are common resources or government owned; the resources used to produce private goods are all privately owned. B) individuals reveal their preferences for a public good but they do not have to reveal their preferences a private good. C) the demand for a private good produces consumption externalities; the demand for a public good produces production externalities. D) individuals reveal their preferences for a private good but they do not have to reveal their preferences for a public good.