If net exports fall, what actions could a central bank take to stabilize the economy?
Increase the money supply. (Lower interest rates.)
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Which of the following is true?
a. Items that supply the nation's currency to the foreign exchange market are recorded as credits in the nation's balance of payments accounts. b. Items that create a demand for the nation's currency in the foreign exchange market are recorded as debits in the nation's balance of payments accounts. c. The purchase of a BMW from a German automaker by a U.S. college professor would be recorded as a debit in the U.S. balance of payments accounts. d. Both a. and b. are correct.
Unregulated competitive markets for services with negative externalities, such as gambling, tend to establish a price for the service that
A. provides a modest stipend for support of recovering addicts. B. supports efficient use of scarce resources. C. is too high to support efficient use of scarce resources. D. is too low to support efficient use of scarce resources.
If the four-firm concentration ratio for an industry equals 100 percent, then definitely
A) the Herfindahl-Hirschman Index (HHI) equals 10,000. B) the industry is a monopoly. C) a small number of firms are in the industry. D) there are no barriers to entry into the industry.
According to the misperceptions theory, short-lived shocks may have long-term effects on the economy because of
A) multiplier effects. B) propagation mechanisms. C) accelerator effects. D) automatic stabilizers.