Based on the diagram, if potential output equals 8,000 and the real interest rate is 4 percent, then there is ________ gap and the Fed must ________ the real interest rate so that output will equal potential output.  

Suppose Honda purchases a car factory in the United States. This purchase is entered into which of the balance of payments accounts?

A) business purchases account B) current account C) capital and financial account D) trade account E) official settlements account

Every international transaction recorded in the balance of payments has both a credit item and a debit item. In the case of a U.S. foreign aid, a debit in the balance of payments, what is the offsetting credit? Explain.

What will be an ideal response?