Author Question: Suppose the United States initially has a trade deficit. Then U.S. firms increase their imports from ... (Read 128 times)

lak · **on:** Jun 29, 2018

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.