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An Increase in Perceived Risk of Foreign Assets Increased Both

question 70

True/False

An increase in perceived risk of foreign assets increased both the financial account surplus and current account deficit in the United States during the late 1990s.

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Definitions:

Price Elasticity

An index reflecting the degree to which the demand for a product varies with a shift in its cost.

Supply

represents the total amount of a product or service that is available for purchase at any given price in a market.

Price Change

Price change refers to the variation in the cost of goods and services over time.

Equilibrium Price

The price in a competitive market at which the quantity demanded and the quantity supplied are equal, there is neither a shortage nor a surplus, and there is no tendency for price to rise or fall.

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