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A. I f the value of a nation’s imports exceeds the value of its exports, which of the following is NOT true?

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a. Net exports are negative.

b. GDP is less than the sum of consumption, investment, and government purchases.

c. Domestic investment is greater than national saving.

d. The nation is experiencing a net outflow of capital.

B. I f a nation’s currency doubles in value on foreign exchange markets, the currency is said to

_________, reflecting a change in the _________ exchange rate.

a. appreciate; nominal

b. appreciate; real

c. depreciate; nominal

d. depreciate; real

C. I f the U.S. dollar appreciates and prices remain the same at home and abroad, foreign goods become _________ expensive relative to American goods, pushing the U.S. trade balance toward _________.

a. more; surplus

b. more; deficitc. less; surplus

d. less; deficit

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