1. As you now know, the U.S. has run persistent current-account deficits for decades. Which of the following is consistent with this observation?

a. Gross domestic income exceeds domestic spending ( C+I+G)

b. Domestic spending (C+I+G) exceeds GDP

c. GDP exceeds domestic speeding (C+I+G)

d. National Saving exceeds Gross private investment. (i.e., S+(T-G)> I)

2. Which of the following is consistent with the observation that Germany has been running persistent current-account surpluses over the past decade?

a. National saving (S+(T-G)) < private investment (I)

b. National saving (S+(T-G)) > private investment (I)

c. GDP < domestic spending (C+I+G)

d. a and c