How are the current account and the financial account related?
What will be an ideal response?
These two accounts are inversely related: the financial account is the flip side of the current account. When a country runs large deficits in its current account, it is financed by large surpluses in its financial account. In other words, when a country imports more than it exports, it must finance that deficit with a surplus of credits in its financial account.
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Time-series studies of consumption reveal that
A) the long-term saving ratio is rising. B) the long-term saving ratio is falling. C) the long-term saving ratio is constant but the marginal propensity to consume is falling. D) both the long-term marginal propensity to save and the long-term saving ratio are constant.
One reason the Federal Reserve Board in Washington did not act as a lender of last resort during the early years of the Great Depression, was its power struggle with ____
a. U.S. Treasury b. foreign central banks c. Federal Reserve Bank of New York d. President Roosevelt
The country of Zlatan is in serious financial crisis after the banks of the country suffered huge losses. Most of the loans were granted to customers without any proper verification, resulting in a high rate of default. The government decided to create an Office of Thrift Supervision to insure deposited funds and to ensure that banks do not indulge in risky lending. Which of the following is a
likely consequence of this step? a. Banks will stop purchasing government bonds. b. Banks will stop keeping a certain amount of their reserves as deposits with the central bank. c. Banks will want to ensure that the difference between their assets and liabilities is positive. d. Banks will stop purchasing government bonds.
In the Easy Step Interview, you must identify:
a. Type of Industry b. Company name c. Company address d. All of these