The U.S. current account equals
A) U.S. exports - U.S. imports - net income from foreign investments + net transfers from abroad.
B) U.S. exports - U.S. imports + net income from foreign investments + net transfers from abroad.
C) U.S. exports + U.S. imports + net income from foreign investments + net transfers from abroad.
D) U.S. imports - U.S. exports + net income from foreign investments + net transfers from abroad.
B
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What is the essential characteristic of money?
A) It must be backed by some other tradable commodity. B) It must be backed by gold or silver. C) It must be accepted and used by people as a general medium of exchange. D) It must be declared by government authority.
How does the effect of changes in foreign demand compare to the effect of changes in the foreign exchange rate?
a. Changes in foreign demand cause a shift in the aggregate demand curve, whereas changes in the foreign exchange rate cause movement along the curve. b. Changes in foreign demand shift the aggregate demand curve rightward, whereas changes in the foreign exchange rate shift the curve leftward. c. Changes in foreign demand cause movement along the aggregate demand curve, whereas changes in the foreign exchange rate cause curve shifts. d. Changes in foreign demand and changes in the foreign exchange rate can both shift the aggregate demand curve.