18. Consider a country in the two-period analysis of trade imbalances with zerotrade imbalances and no GNP growth between the two periods. Which of thefollowing statements can be made about this country?a. The country is in free trade in both the periods.b. The country experiences a very high rate of inflation in period 2.c. The average standard of living in the country remains stable over the twoperiods.d. The average unemployment rate in the country is relatively lower in period 2than in period 1.e. National welfare in the country is relatively higher in period 2 than in period 1.19. When a country runs a trade deficit, it simultaneously runs: a. a balance ofpayment deficit.b. a balance of payment surplus.c. a financial account surplus.d. a financial account deficit.e. a current account surplus.8. Which of the following is an additional concern for a country financing its tradedeficit through non debt asset flows?a. It lowers the country's current average living standards.b. It lowers the country's future average living standards.c. It slackens the country's GDP growth.d. It aggravates the problem of unemployment.e. It transfers the ownership of productive assets to foreigners.

18. Consider a country in the two-period analysis of trade imbalances with zero trade imbalances and no GNP growth between the two periods. Which of the following statements can be made about this country? a. The country is in free trade in both the periods. b. The country experiences a very high rate of inflation in period 2. c. The average standard of living in the country remains stable over the two periods. d. The average unemployment rate in the country is relatively lower in period 2 than in period 1. e. National welfare in the country is relatively higher in period 2 than in period 1.

18. Consider a country in the two-period analysis of trade imbalances with zero trade imbalances and no GNP growth between the two periods. Which of the following statements can be made about this country? a. The country is in free trade in both the periods. b. The country experiences a very high rate of inflation in period 2. c. The average standard of living in the country remains stable over the two periods. d. The average unemployment rate in the country is relatively lower in period 2 than in period 1. e. National welfare in the country is relatively higher in period 2 than in period 1.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q3
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