The US Balance of Payments Status May Improve When

question 82

Multiple Choice

The U.S. balance of payments status may improve when

• A) the inflation rate increases in the United States relative to other countries.
• B) political instability in other countries increases.
• C) the world demand for U.S. products falls.
• D) the American government increases its spending on foreign aid.

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Definitions:

Persistent Unemployment

A situation where unemployment remains high or continues over a long period, often due to structural factors in the economy.

Wage Discrimination

The practice of paying different wages to employees who perform similar jobs, based on non-job-related factors like gender, race, or age.

Efficiency Wage

A wage set above the market equilibrium to increase productivity by encouraging higher effort or reducing turnover among employees.

Positive Amount of Unemployment

A situation where there is a nonzero level of unemployment in the economy, often considered normal due to frictions and transitions in the job market.