Mark which statement is TRUE (T).

If you joined the Council of Economic Advisor for the US President, the most effective policy measure to reduce the US trade (4.3% of GDP) and current account deficits would be:

(A) To advise Fed Governor Jay Powell to follow Europe and adopt a negative Fed Funds rate

(B) Recommend a massive program of subsidies to promote US exports

(C) Escalate the trade war, raising import tariffs against all the countries against which the US runs a trade deficit

(D) Reduce domestic absorption (spending) by reducing the US fiscal deficit

(E) None of the above

Mark which statements is False (F).

Between 2014 and 2018, China's current account surplus as a % of GDP declined from 2.2% to 0.4%. This deterioration of 1.8% of GDP in China's current account surplus is the result of

(A) A large increase in import duties levied by the USA on Chinese exports

(B) A decline in China's savings ratio to GDP

(C) An increase in private consumption as a % of GDP

(D) A reduction in China's trade surplus

(E) A decline in the current account surplus is likely to have been also associated with a reduction in China's government budget deficit as a % of GDP

Other things equal, and assuming efficient markets, if a Honda Accord costs US$24,682 in the US, then at an exchange rate of US$1.57/, the Honda Accord should cost ________ in Great Britain.

(A) 24,682

(B) 38,751

(C) 10,795

(D) 15,721

(E) 17,521

Please mark the only correct answer. Maria wants to export Alpaca wool from Peru to South Africa but she can't find a quote for the Rand (R) using the Peruvian Sol (S/) as the Base. However, on January 24, 2020, Bloomberg quoted the Rand at R14.3939/US$ and the Sol at S/3.3238 per US$. Maria concludes that the Rand per Sol cross should be:

(A) 0.2309 Rand per Sol

(B) 47.8424 Rand per Sol

(C) 4.3306 Rand per Sol

(D) 3.4501 Rand per Sol

(E) 2.4762 Rand per Sol