Under the price-specie-flow mechanism, what happens when, say, Germany's current account surplus is greater than its non-reserve capital account deficits?
A) German loans will finance all foreign net imports.
B) Automatic drop in German domestic prices and rise in foreign prices.
C) Gold reserves will flow into Germany.
D) Gold reserves will flow out of Germany.
E) Germany will experience a deficit.
C
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Tom and Jerry are the only members of society. The table above shows their marginal benefits from defense satellites, a public good. If the marginal social cost of a satellite is $95, the efficient quantity of satellites is
A) 0. B) 1. C) 2. D) 3.
Based on Table 4.1, according to the Heckscher-Ohlin Theorem, U.S. exports should be goods that
A) intensively use labor input. B) intensively use capital input. C) use capital and labor in about equal proportions. D) use either labor or capital input, depending on the good.