CH_2_QME - 1. A high home inflation rate relative to other...

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1. A high home inflation rate relative to other countries would _______ the home country’s current account balance, other things equal. A high growth in the home income level relative to other countries would _______ the home country’s current account balance, other things equal. A) increase; increase B) increase; decrease C) decrease; decrease D) decrease; increase 2. If a country’s government imposes a tariff on imported goods, that country’s current account balance will likely __________ (assuming no retaliation by other governments). A) decrease B) increase C) remain unaffected D) either A or C are possible 3. The “J curve” effect describes: A) the continuous longterm inverse relationship between a country’s current account balance and the country’s growth in gross national product. B) the short-run tendency for a country’s balance of trade to deteriorate even while its currency is depreciating. C)
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This note was uploaded on 03/01/2012 for the course FINANCE 780 taught by Professor Scott during the Spring '12 term at Missouri State University-Springfield.

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CH_2_QME - 1. A high home inflation rate relative to other...

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