Which statement best describes the current account balance in the short run?
A) Monetary expansion lowers the current account balance.
B) Monetary expansion keeps the current account balance the same.
C) Fiscal expansion increases the current account balance.
D) Fiscal expansion keeps the current account balance the same.
E) Monetary expansion increases the current account balance.
Question 2
U.S. reserve requirements
A) are rejected by half the banks operating in the United States.
B) show how regulatory asymmetries can operate to enhance the profitability of Eurocurrency trading.
C) tend to harm the bank's business and decrease monetary aggregates.
D) force banks to hold a portion of its assets in a liquid form easily mobilized to meet sudden deposit outflows.
E) remain in place, but capital requirements have begin defaulting.
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