Which of the following transactions represents a deficit in the current account of the US balance of payments?
a) the moscow capital investment corporation makes a loan to a US firm
b) a US subsidiary exports raw materials to its french parent company
c) US firms and individuals receive dividends on US investments in latin america
d) US tourists in great britain purchase pounds sterling
e) foreigners purchase US securities
Ans: d) US tourists in great britain purchase pounds sterling
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From the economic point of view, profit is
A) a four-letter word. B) the same as loss. C) the result of uncertainty. D) a sign of economic injustice. E) none of the above.
If expectations about inflation are adaptive, they are ________
A) formed by looking at the future B) likely to change rapidly C) based on past inflation D) all of the above E) none of the above
The market for chewing gum is competitive with a current price of 50 cents per pack and quantity of 100,000 packs. Which of the following events would lead to a new equilibrium price of 40 cents and quantity of 80,000 packs?
a. an increase in the price of other kinds of candy b. an increase in the price of the ingredients used to make chewing gum c. a decrease in the number of young people in the population d. an agreement by workers in the chewing gum industry to work for lower wages e. an improvement in chewing gum production technology
Which of the following observations regarding economic goods is incorrect? a. They are limited in supply
b. They are desirable. c. They are solely low-priced essential goods. d. They are scarce goods created from scarce resources