To derive the external balance relationship under high capital ...

[ap345]

To derive the external balance relationship under high capital mobility and floating exchange rates, an increase in government spending must be followed by
 
  A) an increase in money stock to restore the balance of payments equilibrium.
  B) a decrease in money stock to restore the balance of payments equilibrium.
  C) a depreciation of the currency to restore the balance of payment equilibrium.
  D) a decrease in investment spending to restore the balance of payments equilibrium.

Question 2

A major cause of environmental degradation in developing countries is
 
  (a) debt for nature swaps.
  (b) poverty.
  (c) a lack of public transportation.
  (d) land reform.

[Anton]

Answer to Question 1

A

Answer to Question 2

B