Author Question: In a country like Saudi Arabia, which earns substantial income from holding the stocks and bonds of ... (Read 74 times)

DyllonKazuo · **on:** Jun 30, 2018

In a country like Saudi Arabia, which earns substantial income from holding the stocks and bonds of other countries, we would expect

A) GNP to be larger than GDP.
B) a current account deficit.
C) a current account surplus larger than GNP.
D) a current account surplus larger than GDP.
E) GDP to be larger than GNP.

Question 2

Assume that expected inflation is based on the following: et = t-1. If = 1, we know that

A) a reduction in the unemployment rate will have no effect on inflation.
B) low rates of unemployment will cause steadily increasing rates of inflation.
C) the actual unemployment rate will not deviate from the natural rate of unemployment.
D) the Phillips curve illustrates the relationship between the level of inflation rate and the level of the unemployment rate.