When the current account is in deficit, the capital account must
A. be balanced.
B. be zero.
C. not add to the deficit.
D. have an equal and offsetting surplus.
D. have an equal and offsetting surplus.
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The process of negotiating labor contracts between the union and management concerning wages and working conditions is called
A. collective bargaining. B. featherbedding. C. lobbying. D. an apprenticeship.
Most of the pressure for a monetary growth rule has disappeared because since 1980,
A) the relationship between movements in the money supply and movements in real GDP and the price level have become much weaker. B) the relationship between movements in the money supply and movements in real GDP and the price level have become much stronger. C) the relationship between movements in interest rates and movements in real GDP and the price level have become much weaker. D) the relationship between movements in interest rates and movements in real GDP and the price level have become much stronger.
Firms often seek to borrow money to expand their capital stock, and the price they pay for that money is the interest rate. What happens to the supply of money (to lend) if the interest rate increases?
A. It increases. B. It decreases. C. It does not change. D. It depends entirely on the interest rate.
Suppose coffee is sold in a monopolistically competitive market, where coffee is differentiated by coffee shop location. As firms enter in the long run and the price of coffee falls:
A. the market quantity of coffee demanded will increase, but the quantity of coffee supplied by any individual coffee shop declines. B. the market quantity of coffee demanded will decrease as does the quantity supplied from any individual coffee shop. C. the average costs of production decline. D. the profits of individual coffee shops increase.