When the U.S. has a current account surplus, we know that it is also
A) running a balanced trade account.
B) lending to the rest of the world.
C) borrowing from the rest of the world.
D) suffering from negative investment income.
E) none of the above
Question 2
Assume that expected inflation is based on the following: et = t-1. An increase in will cause
A) an increase in the natural rate of unemployment.
B) a reduction in the natural rate of unemployment.
C) no change in the natural rate of unemployment.
D) inflation in period t to be more responsive to changes in unemployment in period t.
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