Which of the following is FALSE?
A) Countries that import more than they export are experiencing a trade deficit.
B) To the extent that consumers enjoy the goods being imported, a country experiences an increase in its well-being when it is incurring a trade deficit.
C) A floating exchange rate has the effect of exacerbating domestic fluctuations in the level of business activity.
D) A country seeking to maintain a fixed exchange rate has to maintain foreign currency reserves.
Correct Answer:
Verified
Q21: If one country has a trade surplus,
A)
Q22: As real interest rates rise in Mexico
Q23: If labor productivity improves in India relative
Q24: The current account and the capital account
A)
Q25: When there is political instability in another
Q27: Exchange rates that are allowed to fluctuate
Q28: If the foreign exchange rate is 70
