What is the savings and investment equation? If S > I,then what is true of net foreign investment? Explain,using the savings and investment equation.
A federal budget deficit can lead to a(n)
A) appreciation of the dollar and an increase in net exports.
B) depreciation of the dollar and a decline in net exports.
C) appreciation of the dollar and a decline in net exports.
D) depreciation of the dollar and an increase in net exports.
A federal budget deficit may ________ exchange rates (foreign currency per domestic currency)and ________ the balance of trade for goods and services.
A) raise; reduce
B) raise; raise
C) reduce; reduce
D) reduce; raise
The idea of 'twin deficits' refers to the possibility that a large federal budget deficit will lead to a
A) balance of payments deficit.
B) financial account deficit.
C) trade surplus.
D) current account deficit.