When foreign residents buy U.S. Treasury securities to finance ...

[Garrulous]

When foreign residents buy U.S. Treasury securities to finance the budget deficit
 
  A) we can also anticipate a decrease in the trade deficit.
  B) the trade deficit will not be affected.
  C) we can also anticipate an increase in the trade deficit.
  D) the public debt will be reduced.

Question 2

According to the Solow model, given the levels of total efficiency units of labor and technology:
 
  A) efficiency units of labor do not play any role in the determination of steady-state equilibrium level of GDP.
  B) there is a maximum fixed level of GDP that an economy can achieve by increasing savings.
  C) increases in the savings rate is the sole reason for sustained economic growth.
  D) increases in the rate of physical capital accumulation can be the sole reason for sustained economic growth.

[mjbamaung]

Answer to Question 1

C

Answer to Question 2

B