When Japanese investors who own hotels in Hawaii receive profits from their hotel operations, the receipt of such profits is recorded in the balance of payments as a
a. current account item.
b. financial account item.
c. settlement account item.
d. unilateral transfer.
a. current account item.
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Foreign portfolio investment occurs when an individual or firm buys stock or bonds issued in another country
Indicate whether the statement is true or false
According to Keynesians, an increase in the money supply will:
a. decrease the interest rate, and increase investment, aggregate demand, prices, real GDP, and employment. b. decrease the interest rate, and decrease investment, aggregate demand, prices, real GDP, and employment. c. increase the interest rate, and decrease investment, aggregate demand, prices, real GDP, and employment. d. only increase prices.
An increased tax on profits leaves the optimal rate of output unchanged in the short run.
Answer the following statement true (T) or false (F)
Prices in a market economy perform a rationing function because they reflect
A. the extent to which the goods are necessities. B. the relative scarcity of the goods. C. the strength of the supply curve. D. the demand of all buyers in the market.