Author Question: The current account surplus A) is a decreasing function of disposable income and an increasing ... (Read 29 times)

wenmo · **on:** Jun 30, 2018

The current account surplus

A) is a decreasing function of disposable income and an increasing function of the real exchange rate.
B) is an increasing function of disposable income and an increasing function of the real exchange rate.
C) is an increasing function of disposable income and a decreasing function of the real exchange rate.
D) is a decreasing function of disposable income and a decreasing function of the real exchange rate.
E) is an increasing function of disposable income and a decreasing function of aggregate demand.

Question 2

The J-curve illustrates which of the following?

A) the effects of depreciation on the home country's economy
B) the immediate increase in current account caused by a currency depreciation
C) the gradual adjustment of home prices to a currency depreciation
D) the short-term effects of depreciation on the current account
E) the Keynesian view of international trade dynamics