Suppose the United States initially has a trade deficit. Then U.S. firms increase their imports from Canada, financing that increase by borrowing from Canada
The current account deficit is now ________ and the capital and financial account surplus is now ________. A) larger; larger
B) larger; smaller
C) smaller; larger
D) smaller; smaller
A
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Assume consumers eat either rice or pasta for dinner every night. If the price of rice increases, then one would expect to see:
A. an increase in the quantity of pasta demanded. B. a decrease in the demand for pasta. C. a decrease in the quantity of pasta demanded. D. an increase in the demand for pasta.
Which of the following describes the difference between the market demand curve for a perfectly competitive industry and the demand curve for a firm in this industry?
A) The market demand curve is downward sloping; the firm's demand curve is a vertical line. B) The market demand curve is downward sloping; the firm's demand curve is a horizontal line. C) The market demand curve is a horizontal line; the firm's demand curve is downward sloping. D) The market demand curve can not have a constant slope; the firm's demand curve has a slope equal to zero.
Trade between countries is only based on absolute advantage
Indicate whether the statement is true or false
Household investment choices need to be balanced between the expected return and the degree of risk involved. There is also the question of liquidity, which means how quickly you can convert the asset back into cash. Which of the following represents an investment with medium return, high risk, and low liquidity?
a. Precious metals b. House c. Mutual funds d. Savings account