A trade deficit can be financed by all of the following except
a. a surplus in the capital account.
b. a surplus in the official reserves transaction account.
c. selling U.S. assets to foreigners.
d. U.S. citizens buying foreign stocks and bonds.
Question 2
Evidence in favor the Keynesian model would be that:
a. investment is not sensitive to changes in tax rates.
b. labor supply is inelastic.
c. the aggregate price level is positively correlated with income.
d. all of the above.
e. none of the above.
American Foreign Trade, 1790–1812
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