Question

in the u.s., international trade raises many
that are the same as issues raised by
in the domestic economy.
monetary policy issues; real productivity gains
fiscal policy issues; trade - offs that control inflation
public policy issues; competitive market forces
public policy issues; workers demands for long - term
benefits
question 16 (1 point)
if an economy has a high level of trade in goods and services
relative to gdp and its exports and imports are balanced, what
value will the net flow of foreign investment be?
unchanged
lower
higher
zero

Explanation:

For the first question, international trade often brings up public - policy matters (like regulations, tariffs etc.) which are also influenced by competitive market forces in domestic economies. For the second question, according to the balance of payments identity, when exports (X) and imports (M) are balanced (X = M), the current account (CA) is balanced. And since CA+FA (financial account)=0 (where FA is related to foreign investment flow), if CA = 0, then the net flow of foreign investment (related to FA) is zero.

Answer:

For the first question: public policy issues; competitive market forces. For the second question: zero.