Suppose that the U.S. government acquires more foreign currency. How does this change affect the balance of payments accounts?
A) The capital and financial account is negative.
B) The capital and financial account is positive.
C) The official settlements account balance is negative.
D) The official settlements account balance is positive.
E) The balance of payments account sum to a positive number equal to the value of the additional foreign currency the government has obtained.
Question 2
In the United States during the 1930s
A) government spending decreased and taxes increased, resulting in a fiscal contraction.
B) government spending and taxes both decreased, resulting in a net fiscal contraction.
C) government spending increased and taxes decreased, resulting in a fiscal expansion.
D) government spending and taxes both increased, resulting in zero net fiscal expansion.
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