If real income rises faster than absorption during a time of ...

[MirandaLo]

If real income rises faster than absorption during a time of economic expansion, then
 
  A) the nation will experience a current account surplus.
  B) the nation will experience a current account deficit.
  C) national production will increase until absorption and income are balanced.
  D) the nation's imports must rise relative to its exports.

Question 2

If real income is 250b and the amount of domestic absorption is 322b, what is the current account balance?
 
  A) The current account deficit is 72b.
  B) The current account surplus is 72b.
  C) The current account deficit is 572b.
  D) The current account surplus is 572b.

[makaylafy]

Answer to Question 1

A

Answer to Question 2

A