What does a balance of trade deficit imply?
a. exports of goods and services exceed imports of goods and services
b. imports of goods and services exceed exports of goods and services
c. investment income received from abroad exceeds investment income paid to foreigners
d. investment income paid to foreigners exceeds investment income received from abroad
e. investment by foreigners exceeds domestic investment in other countries
Ans: b. imports of goods and services exceed exports of goods and services
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A trade surplus occurs when:
A. quotas exceed tariffs. B. tariffs exceed quotas. C. imports exceed exports. D. exports exceed imports.
The main function of the Federal Open Market Committee is
a. to control the printing of currency. b. to determine the path of tax rates. c. to use open market operations to control the nation's money supply. d. to create and issue bonds on behalf of the Treasury. e. to oversee economic activity in the various Federal Reserve districts.
Developing countries do:
A. compete with one another for foreign investment, and this competition reduces the benefits from foreign investment. B. not compete with one another for foreign investment, because they have sufficient domestic saving to finance their investment needs. C. not compete with one another for foreign investment, because they lack the infrastructure to attract it in the first place. D. compete with one another for foreign investment, but this competition is beneficial to developing countries because it insures a more efficient allocation of resources.
When AVC is rising, ATC
A. must be rising. B. must be falling. C. may be falling or rising. D. will remain constant.