Which of the following is excluded in the current account?
A. goods exports
B. goods imports
C. capital inflow and outflow
D. net unilateral transfers
Answer: C
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The natural rate hypothesis states that when the inflation rate
A) increases, the unemployment rate will decrease permanently. B) changes, the unemployment rate changes temporarily and eventually returns to the natural unemployment rate. C) decreases, the inflation rate will decrease permanently. D) changes, the change is only temporary, and eventually the inflation rate returns to the natural inflation rate. E) increases, the natural unemployment rate increases.
Negative net exports represent reduced investment because
A) payments for imports will be used by foreigners to buy domestic goods in the future. B) payments for exports will be used by foreigners to buy domestic goods in the future. C) payments for imports will be used by U.S. citizens to buy domestic goods in the future. D) None of the above.
What is the most important factor for Federal Reserve currency to be accepted as money?
A) its acceptance by businesses and households in the United States in exchange for goods and services B) its designation as legal tender by the federal government C) the willingness of the federal government to accept it in exchange for an equivalent amount of gold or silver coins D) the willingness of foreign businesses and banks to accept it in exchange for goods and services
When the price level rises unexpectedly, some businesses may mistake part of the increase for an increase in the price of their product relative to others and so decrease their production
a. True b. False Indicate whether the statement is true or false