With the Bretton Woods system of international exchange rates
A. there were fixed exchange rates, and most countries were obligated to intervene to maintain the values of their currencies within 1 percent of par value.
B. the value of a country's currency was determined strictly by the laws of supply and demand.
C. a nation's balance of payments was eliminated.
D. the value of a country's currency was determined by its stock of gold.
Answer: A
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Suppose the majority of the shares of Yahoo stock were sold to an Italian firm. Other things equal, this will
A) increase the balance of the U.S. current account. B) increase the balance of the U.S. financial account. C) create a capital outflow in the United States. D) decrease net portfolio investment in the United States.
A government can impose an import quota or an equivalent tariff that achieves the same impact on trade. What is the key difference in the welfare outcomes of these two policy options?
A) The domestic quantity supplied is larger under the tariff policy. B) The domestic price is higher under the tariff policy. C) The domestic price is lower under the tariff policy. D) The government captures some of the profits from foreign suppliers through the tariff revenue.
The benefits-received principle of taxation is most evident in:
A. progressive tax rates. B. excise taxes on gasoline. C. the personal income tax. D. the corporate income tax.
The level of aggregate output demanded rises when the price level falls, because the resulting decrease in the interest rate will lead to
A. higher investment spending and lower consumption spending. B. higher investment spending and higher consumption spending. C. lower investment spending and higher consumption spending. D. lower investment spending and lower consumption spending.