Question
If the real interest rate is 5 percent in the United States and 8 percent in Canada, what will happen over time to the current
If the real interest rate is 5 percent in the United States and 8 percent in Canada, what will happen over time to the current and financial/capital accounts in the United States?
A. The financial/capital account will have a deficit, and the current account will remain constant.
B. The financial/capital account will remain constant, and the current account will have a surplus.
C. The financial/capital account will have a surplus, and the current account will have a deficit.
D. The financial/capital account will have a deficit, and the current account will have a surplus.
E. Neither the current nor the financial/capital account will change.
*The financial/capital account will have a surplus, and the current account will have a deficit. is incorrect*
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Rethinking Macroeconomics
Authors: John F McDonald
2nd Edition
1000434699, 9781000434699
