Refer to the given data. The United States has a balance of goods:
The following table contains hypothetical data for the 2012 U.S. balance of payments. Answer the question on the basis of this information. All figures are in billions of dollars.
A. deficit of $10 billion.
B. surplus of $30 billion.
C. deficit of $30 billion.
D. surplus of $20 billion.
D. surplus of $20 billion.
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In the simple model of multiple deposit creation in which banks do not hold excess reserves, the increase in checkable deposits equals the product of the change in reserves and the
A) reciprocal of the excess reserve ratio. B) simple deposit expansion multiplier. C) reciprocal of the simple deposit multiplier. D) discount rate.
You are hired by the Council of Economic Advisors (CEA) as an economic consultant. The chairperson of the CEA tells you that she believes the current unemployment rate is too high. The unemployment rate can be reduced if aggregate output increases. She wants to know what policy to pursue to increase aggregate output by $400 billion. The best estimate she has for the MPC is 0.8. Which of the following policies should you recommend?
A. reduce the budget deficit by $400 billion B. reduce taxes by $100 billion and increase government purchases by $50 billion C. increase government purchases by $100 billion D. reduce taxes by $100 billion