<u>Solution and Explanation:</u>
a) The deficit is structural deficit, not cyclical deficit
b) Structural deficit is $450 billion
Revenue less than outlays; the GDP = Potential GDP
cyclical - during a recession
, Structural - normal times
This is the budget deficit at potential GDP
Structural deficit = Total Government deficit - Cyclical Deficit
Government expenditures do not change with output
c) the deficit is both structural and cyclical
200 billion below potential; at potential output it will be 200 billion higher
Cyclical deficit = $200 billion
Structural = 450 - 200 = 250
d)
Cyclical surplus = $350 billion
Structural deficit = $100 billion
e) Structural as normal stabilization policies will not remove a structural deficit
Group of answer choices.
A. German tourists traveling abroad.
B. American tourists traveling in France.
C. Canadian firms selling in Germany.
D. Canadian investors with money investments in Germany.
Answer:
B. American tourists traveling in France.
Explanation:
A foreign exchange market can be defined as a type of market where the currency of a country is converted to that of another country.
For example, the conversion of the United States of America dollars into naira, rands, yen, pounds, euros, etc., at the foreign exchange market.
In this context, a stronger euro is less favorable for American tourists traveling in France because the currency of the Americans, which is the U.S dollars would exchange at a far lesser rate to the euros.
However, a stronger euro would be more favorable for German tourists that are traveling abroad, Canadian firms that trade or sells its products in Germany, and Canadian investors who are having money investments in Germany.
Note: Euro is the official currency (legal tender or money) of Germany.
Answer:
$70
Explanation:
The opportunity cost is the value in which the advantage is produced from the options available. The best gain is term as the opportunity cost
In the question, it is given that the offered price is $70 and the yesterday price is $30 which was paid which terms as a sunk cost. This cost is not useful for decision making as well as for computing the opportunity cost also
So, only $70 would be considered
Answer: Money Supply Decrease of $50 million.
Explanation:
$40 million was deposited while $50 million was withdrawn.
The net change in the banking system would therefore be,
= 40 - 50
= -$10 million
($10 million ) means that more money left than came in.
The money supply can be calculated as the net change multiplied by the money multiplier.
The Money Multiplier is denoted as 1/reserve requirement.
Change in Money Supply is,
= -10 million * 1/20%
= -$50 million
Going by the negative number it means that Money Supply reduces by $50 million.
Answer:
C. Country A would focus on growing carrots to trade with country country B.
Explanation:
Country A can produce twice as many carrots as country B. this indicates that country A seems to have a comparative advantage over Country B in carrot production. Both countries have equal capacity in the production of apples.
Country A should focus on producing carrots for sales to country B. It can produce double what country B can, meaning its production costs are lower. Country A can sell carrots to country B at a lower price than it would cost country B to produce its carrots. Therefore, country A would be prudent to focus on producing carrots and trade them to country B.
