Y6

In an economic recession, we expect that the government budget balance

a. will fall as tax receipts fall and government spending rises.

b. will rise as tax receipts rise.

c. will remain unchanged.

d. will fall as Kiwisaver returns decline.

Which of the following is true about the balance of payments?

a. X - M + NFI equals 0

b. X - M + NFI - (capital account balance + financial account balance) equals 0

c. X - M + NFI + capital account balance + financial account balance equals 0

d. X - M - NFI equals 0

When an economy goes into a recession (a decline in GDP) government savings usually

a. does not change as there is no relationship between savings and GDP.

b. changes but the change is random.

c. rises.

d. falls.

Net foreign income is

a. income earned by owning foreign factors of production fewer payments to foreign owners of domestic factors of production.

b. interest payments on New Zealand's overseas debt less interest received on loans that New Zealanders make to overseas entities.

c. the difference between what a country receives from the rest of the world and what it pays to the rest of the world.

d. zero by definition.