U.S. exports of goods and services flow to households and firms in ________, and U.S. financial inflows of capital flow to households and firms in ________.
A) the rest of the world; the United States
B) the rest of the world; the rest of the world
C) the United States; the United States
D) the United States; the rest of the world
E) the United States; the rest of the world and the United States
Question 2
Mark has a two-year wage contract with his employer. Mark's wage contract specifies a 50,000 salary for the first year, and specifies a salary increase equal to the percentage increase in the CPI during the second year.
The percentage increase in the CPI during the year was 4.0 percentage points. If the CPI overstates inflation by 1.0 percentage point, at the end of the first year Mark's salary increased by ________ more than it would have without the upward bias.
A) 500 B) 50 C) 3000 D) 1500 E) 2000
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