An import is a product
A) produced in and purchased by residents of the home country.
B) produced in the home country and sold in another country.
C) produced in and sold to the residents of a foreign country.
D) produced in a foreign country and purchased by the residents of the home country.
D
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Refer to Figure 11.4. Which diagram illustrates the effect of a decrease in the marginal propensity to consume?
A) A B) B C) C D) D
An example of a credit item in the U.S. balance of payments would be
a. someone sending U.S. dollars to a relative overseas. b. a British tourist spending money at a U.S. nightclub. c. a U.S. tourist flying to Paris on the Concorde. d. General Motors building a factory in Eastern Europe.
A country that exports more than it imports will:
A. have a current account deficit and a capital account surplus. B. have a current account deficit and a capital account deficit. C. have a current account surplus and a capital account deficit. D. have a current account surplus and a capital account surplus.