Potential real GDP is least likely to increase as a result of an:
A. Improvement in technology.
B. Increase in the money wage rate.
C. Increase in the labor force participation ratio.
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Other things equal, which of the following is most likely to decrease a countrys trade deficit?
A. Increase its capital account surplus.
B. Decrease expenditures relative to income.
C. Decrease domestic saving relative to domestic investment.
In which type of regional trade agreement are economic policies conducted independently by the member countries, while labor and capital are free to move among member countries?
A. Free trade area.
B. Common market.
C. Economic union.
A current account deficit is most likely to decrease as a result of an increase in:
A. Domestic savings.
B. Private investment.
C. The fiscal budget deficit.
A decrease in the target U.S. federal funds rate is least likely to result in:
A proportionate decrease in long-term interest rates.
B. An increase in consumer spending on durable goods.
C. Depreciation of the U.S. dollar on the foreign exchange market.