Multiple Choice
Assuming no change in the effective tax rate on capital,an increase in the government budget deficit will raise the current account deficit if and only if the increase in the budget deficit
A) reduces desired national saving.
B) increases desired national saving.
C) reduces desired national investment.
D) increases desired national investment.
Correct Answer:

Verified
Correct Answer:
Verified
Q12: A large open economy has desired national
Q13: An increase in the number of international
Q15: Briefly discuss the idea of "twin deficit."
Q18: You just read that forecasters predict Canada
Q19: Which of the following is true when
Q21: If Ricardian equivalence proposition is true,a budget
Q22: The current account balance consists of<br>A)the trade
Q42: If all international factor payment flows are
Q58: Assume that an increase in Costa Rica's
Q71: If there is an increase in the