Olympus is a small open economy. Which of the following statements is/are correct?1.If the government is running a budget deficit, there will also be a deficit on the trade balanceII.If Olympus is operating at long-run equilibrium and net exports are positive, then Olympus' output must be greater than the amount it isspending on consumption, Investment and government expenditureSelect one:a. Options I and II are correctOb. Neither Option I nor Option Il is correctOc Option I is correct, but Option Il is incorrectOd. Option I is incorrect, but Option II is correct.Clear my choiceIt has been noted that real money balances rise as a period of hyperinflation ends. This occurs becauseSelect one:the country's central bank stops hyperinflation by printing more money.Ob the decrease in expected inflation decreases the nominal interest rate, and this increases the quantity of real balances demanded. This allows thereal money supply to increase even as prices stabiliseO c. the decrease in inflation decreases the expected real interest rate, which raises the quantity of money demandedOd. the real interest rate rises, so people put more of their assets into money Which of the following statements is false?Select one:The proposition that growth in output is temporary and that when real GDP per capita rises above the subsistence level, a population explosioneventually brings real GDP per capita back to the subsistence level is a tenant of classical growth theoryOb The Harrod-Domar growth model suggests that growth is directly related to savings and that if a country's growth rate is 8.75%, while that samecountry's capital-output ratio is 4%, the country in question must have a savings ratio of 35%Oc New growth theory argues that because of the choices people make in the quest for profit the economy can enjoy continual economic growthOd. The Lewis model applies the assumption that disguised unemployment must not exist in the agricultural sector.

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Olympus is a small open economy. Which of the following statements is/are correct? 1. If the government is running a budget deficit, there will also be a deficit on the trade balance 11. If Olympus is operating at long-run equilibrium and net exports are positive, then Olympus' output must be greater than the amount it a spending on consumption, Investment and government expenditure Select one: Ⓒa. Options I and II are correct Ob. Neither Option I nor Option Il is correct Oc. Option I is correct, but Option II is incorrect Od. Option I is incorrect, but Option II is correct.

Olympus is a small open economy. Which of the following statements is/are correct? 1. If the government is running a budget deficit, there will also be a deficit on the trade balance 11. If Olympus is operating at long-run equilibrium and net exports are positive, then Olympus' output must be greater than the amount it a spending on consumption, Investment and government expenditure Select one: Ⓒa. Options I and II are correct Ob. Neither Option I nor Option Il is correct Oc. Option I is correct, but Option II is incorrect Od. Option I is incorrect, but Option II is correct.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter23: The International Trade And Capital Flows

Section: Chapter Questions

Problem 46P: Imagine that the economy of Germany finds itself in the following situation: the government budget...

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