Answer: Option (a) is correct.
Explanation:
Correct Option: The supply of loanable funds but not the supply of dollars in the market for foreign-currency exchange.
If the budget deficit increases, then U.S residents will want to purchase fewer foreign assets and foreign residents wants to buy more of U.S assets.
The budget deficit in the economy has to be financed either by borrowing or by increasing taxes. This budget deficit occurred because of the tax cuts and higher government spending.
If a country running a budget deficit, which lead to reduction in national saving. We all know that interest rate is determined in the loan market, where savers supply the loans to the private borrowers.
So, if there is a fall in the national saving, this will reduced the supply of loans from savers, which raises the interest rate in an economy.
This will attract the foreign flow of capital. This means that demand for domestic assets increases because of the higher interest rate.
Now, if foreign residents want to take an advantage of higher interest rate then they first have to acquire domestic currency.
Therefore, higher interest increases the demand for domestic currency in a market of foreign exchange.
D the lower the taxes(I searched it up)
Answer:
At least $2,500. If the family's income was $0, then the government will transfer $2,500 to them.
Explanation:
A negative income tax refers to a welfare system where individuals earning below a certain amount, instead of being taxed, receive money transfers from the government.
Answer:
Nominal GDP in year 1 = $16
Nominal GDP in year 2 = $25
Nominal GDP in year 3 = $36
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Net export = exports – imports
Nominal GDP is GDP calculated using current year prices
Nominal GDP in year 1 = 4 x $4 = $16
Nominal GDP in year 2 = 5 x $5 = $25
Nominal GDP in year 3 = 6 x $6 = $36
