For an economy as a whole, income must exceed expenditure
a. True
b. False
Indicate whether the statement is true or false
False
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In 2012, the U.S. federal government had a budget deficit. If there is no Ricardo-Barro effect, the budget deficit ________ the real interest rate and ________ the equilibrium quantity of investment
A) lowered; increased B) raised; increased C) lowered; decreased D) raised; decreased E) did not change; did not change
Which of the following is most likely to happen if the demand for money decreases in the domestic economy under floating exchange rates and free capital mobility?
A. The average price level in the domestic economy will decrease. B. The domestic interest rate will increase. C. Domestic borrowing will decline. D. The financial account of the country's balance of payments will deteriorate.