1. Contractionary fiscal policy should be used if:
A) aggregate demand-aggregate supply equilibrium is below potential output.
B) aggregate demand-aggregate supply equilibrium is above potential output.
C) aggregate demand-aggregate supply equilibrium is equal to potential output.
D) none of the above.
2. The difference between the interest income or receipts earned on investments in the rest of the world by the residents of a given country and the payments to foreigners on investments they have made in the given country is called:
A) unilateral transfers.
B) bilateral transfers.
C) net investment income.
D) gross investment income.
3. In the foreign exchange market, the quantity supplied of dollars is 600 whereas the quantity demanded of dollars is 400 results in a:
A) balance of payments surplus of 200.
B) balance of payments deficit of 200.
C) balance of payments surplus of -200.
D) balance of payments deficit of -200.
1. Contractionary fiscal policy should be used if:
A) aggregate demand-aggregate supply equilibrium is below potential output.
B) aggregate demand-aggregate supply equilibrium is above potential output.
C) aggregate demand-aggregate supply equilibrium is equal to potential output.
D) none of the above.
2. The difference between the interest income or receipts earned on investments in the rest of the world by the residents of a given country and the payments to foreigners on investments they have made in the given country is called:
A) unilateral transfers.
B) bilateral transfers.
C) net investment income.
D) gross investment income.
3. In the foreign exchange market, the quantity supplied of dollars is 600 whereas the quantity demanded of dollars is 400 results in a:
A) balance of payments surplus of 200.
B) balance of payments deficit of 200.
C) balance of payments surplus of -200.
D) balance of payments deficit of -200.
