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31. A large tax cut in the United States should lead to an increase in the trade deficit.

a. True

b. False

32. International capital flows tend to reduce the impact of fiscal policy.

a. True

b. False

33. International capital flows tend to reduce the impact of monetary policy.

a. True

b. False

34. The elimination of the federal budget deficit in the 1990s put downward pressure on real interest rates.

a. True

b. False

35. The monetary expansion of the mid-1990s was expected to lead to a currency appreciation.

a. True

b. False

36. The U.S. trade deficits of the late 1990s were due primarily to low saving rates.

a. True

b. False

37. The sum of capital inflows and the trade balance must be zero.

a. True

b. False

38. The U.S. trade deficit is made possible, in part, because of foreigners' demand for U.S. financial assets.

a. True

b. False

39. Increases in stock market wealth have caused Americans to increase their saving rate.

a. True

b. False

40. The United States can reduce its trade deficit by limiting imports through tariffs.

a. True

b. False

 

 

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