Assignment task: State whether the following are True or False. Be sure to briefly explain your reasoning using written, graphical or mathematical arguments
a. According to Ben Bernanke's "savings glut" hypothesis, widening current account deficits in the United States reflected optimal investment and savings responses of domestic firms and households to changing global economic conditions.
b. You are a finance minister for a country. To finance a permanent increase in the deficit you must increase seigniorage revenue. Your only option is to increase the growth rate of the money supply.