Currency and checkable deposits are
A. the major components of money supply M1.
B. assets of the Federal Reserve Banks or of financial institutions.
C. of intrinsic value that determines the relative worth of money.
D. redeemable for gold and silver from the Federal Reserve System.
Answer: A
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Aid sent to a foreign country is an example of ________
A) transfer payment to the foreign country B) export by the home country C) import by the home country D) factor payment to the foreign country
Assume that both the demand curve and the supply curve for DVD players shift to the left but the demand curve shifts more than the supply curve. As a result,
A) both the equilibrium price and quantity of DVD players will decrease. B) the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease. C) the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will decrease. D) the equilibrium price of DVD players will increase; the equilibrium quantity may increase or decrease.
Table 35.1CountryTons of SoybeansComputerChina100300United States150750Based on the information in Table 35.1, assume China and the United States have the same amount of resources with which to produce soybeans and computers and they produce no other goods. The output of computers and soybeans would be greatest if
A. Both countries prohibited trade. B. China specialized in producing soybeans, and the United States specialized in producing computers. C. The United States produced both goods and exported them to China. D. China specialized in producing computers, while the United States specialized in producing soybeans.
For American buyers, there is a decrease in the relative prices of Japanese goods when the ________.
A. inflation rate in Japan is higher than the inflation rate in the United States and there are fixed exchange rates B. inflation rate in the United States is higher than the inflation rate in Japan, and there are flexible exchange rates C. yen appreciates D. dollar appreciates