9. What policies would you recommend to the U.S. government to lower the current account deficit and decrease net capital inflows? A. Allow the U.S. dollar to depreciate significantly. B. Increase national saving relative to investment. C. Eliminate U.S. federal budget deficits. D. Use trade restrictions such as tariffs. E. All of the above.
9. What policies would you recommend to the U.S. government to lower the current account deficit and decrease net capital inflows? A. Allow the U.S. dollar to depreciate significantly. B. Increase national saving relative to investment. C. Eliminate U.S. federal budget deficits. D. Use trade restrictions such as tariffs. E. All of the above.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:What policies would you recommend to the U.S. government to lower
the current account deficit and decrease net capital inflows?
9.
A. Allow the U.S. dollar to depreciate significantly.
B. Increase national saving relative to investment.
C. Eliminate U.S. federal budget deficits.
D. Use trade restrictions such as tariffs.
E. All of the above.
10.
Under the Bretton Woods exchange rate system,
A. Any foreign country could not devalue its currency against the dollar
6
in conditions of 'fundamental disequilibrium."
B. Any foreign country could devalue its currency against the dollar
in conditions of “fundamental disequilibrium," but the system's rules
did not give the United States the option of devaluing against foreign
currencies.
C. Any foreign country could devalue its currency against the dollar in
conditions of “fundamental disequilibrium," and the system's rules did
give the United States the option of devaluing against foreign curren-
cies.
D. The United States could devalue its currency against the foreign
currencies in conditions of 'fundamental disequilibrium."
E. None of the above.
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