The uses-of-saving identity shows that if the government budget deficit rises, then one of the following must happen
A) Private saving must rise, investment must fall, and/or the current account must fall.
B) Private saving must rise, investment must fall, and/or the current account must rise.
C) Private saving must rise, investment must rise, and/or the current account must fall.
D) Private saving must fall, investment must rise, and/or the current account must rise.
A
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Under the Exchange Rate Mechanism of the European Monetary System, when the German mark depreciated below its lower limit against the British pound, the German central bank was required to buy ________ and sell ________,
thereby ________ international reserves. A) pounds; marks; losing B) pounds; marks; gaining C) marks; pounds; gaining D) marks; pounds; losing
When drawn against the real interest rate, output demand increases if
A) current government expenses increase. B) future government expenses increase. C) current taxes increase. D) future taxes increase.
Under the perfectly competitive market structure, the demand curve of an individual firm is
A) perfectly inelastic. B) downward sloping. C) relatively inelastic. D) perfectly elastic.
Perfectly competitive markets are characterized by a. conditions that discourage new firms from entering the market
b. conditions that allow firms to determine how much they wish to produce, without influencing the market price. c. conditions that presume that each firm produces a unique product. d. conditions that force firms to advertise their product heavily, to compete with other producers.