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Unformatted text preview: b) a higher budget deficit and a higher trade deficit. c) a lower international interest rate. d) a higher budget deficit but a lower trade deficit. Solutions: b) twin deficits 3. Which one of the following is correct: a) Country A will not trade with country B because it is cheaper to produce everything in country A. b) Country A will not trade with country B because country B’s inflation rate is too high. c) Texas and California will not trade because they both use US dollars as their currency. d) Country A and country B will trade with other if they are allowed to trade. Solutions: d)...
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This note was uploaded on 02/13/2012 for the course ECON 410 taught by Professor Hernandez-verme during the Spring '08 term at Texas A&M.
- Spring '08