If a U.S. company imports 10 Toyotas from Japan at $15,000 each, and the Japanese company buys airline tickets on a U.S. airline with the money, how does this affect the U.S. balance of payments accounts?
A) Decline in merchandise trade; increase in financial account
B) Decline in financial account; increase in merchandise trade
C) Decline in merchandise trade; increase in services
D) Decline in services; increase in merchandise trade
C
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Studies of PPP covering many years will be more likely to yield evidence of PPP than studies based on short-run data
Indicate whether the statement is true or false
Which of the following is true about labor productivity?
A) it is the amount of total factor productivity (TFP) per unit of labor B) it is more difficult to measure than TFP C) it is a more general and better measure of productivity than TFP D) all of the above E) none of the above
Which of the following statements is most consistent with the rule of rational choice?
a. "The Environmental Protection Agency should strive to eliminate virtually all air and water pollution." b. "When evaluating new prescription drugs, the Food and Drug Administration should weigh each drug's potential health benefits against the potential health risks posed by known side effects." c. "Police forces should be enlarged until virtually all crime is eliminated." d. "Manufacturers of automobiles should seek to make cars safer, no matter the costs involved."
Suppose your nominal income this year is 5 percent higher than last year. If the inflation rate for the period was 3 percent, then your real income was:
A. increased by 1.67 percent. B. increased by 2 percent. C. increased by 8 percent. D. decreased by 0.6 percent.