Suppose the United States initially has a trade deficit. Then ...

[lak]

Suppose the United States initially has a trade deficit. Then U.S. firms increase their imports from Canada, financing that increase by borrowing from Canada.
 
  The current account deficit is now ________ and the capital and financial account surplus is now ________. A) larger; larger
  B) larger; smaller
  C) smaller; larger
  D) smaller; smaller

Question 2

In the quantity theory of money, the quantity of money is assumed to
 
  A) not influence the velocity of circulation.
  B) rise during recessions.
  C) fall during recessions.
  D) be constant.

[BAOCHAU2803]

Answer to Question 1

A

Answer to Question 2

A

[lak]

Excellent

[Joy Chen]

Gracias!