A nation has a merchandise trade deficit when
a. it has a surplus in its balance of payments.
b. it has a deficit in its balance of payments.
c. the value of its imports of goods is greater than the value of its exports of goods.
d. its current account is in surplus and its capital account is in deficit.
C
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Define the utility possibilities frontier. Explain what it means when society is inside the utility possibilities frontier. Explain what it means when society is on the utility possibilities frontier
Explain what determines the point that society arrives at on the utility possibilities frontier.
Assume the long-term nominal interest rate is 7% and the expected inflation rate is 3%
If the Fed increases the money supply and as a result, the expected inflation rate increases to 5%, then based on the Fisher effect, the long-term real interest rate will A) remain at 4%. B) increase to 6%. C) fall to 3%. D) increase to 9%.