If a country has a current account deficit, which of the following must be true?
(a) It must also show a deficit in its capital account
(b) It must show a surplus in its capital account
(c) It must increase the purchases of foreign goods and services
(d) It must increase the domestic interest rates of its bonds
(e) It must limit the flow of foreign capital investment
Ans: (b) It must show a surplus in its capital account
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A time-series graph displays the price of gold. The slope of the line is negative for periods when the
A) price of gold is low and not changing. B) price of gold is rising. C) quantity of gold is falling. D) price of gold fluctuates. E) price of gold is falling.
Since few Americans would ever be willing to pay more for a sandwich than for a pair of jeans,
A) for most Americans clothing is more important than food. B) for most Americans clothing is more valuable than food. C) for most Americans clothing has more monetary value than food. D) most Americans derive their values from the culture rather than biological necessities. E) most Americans have little difficulty obtaining enough to eat.
Using the information in the above table, the unemployment rate is
A) 4.5 percent. B) 4.3 percent. C) 2.8 percent. D) 6.0 percent.
Which of the following goals are part of the monetary "trilemma"?
a. predictable exchange rates, free movement of capital, and autonomous monetary policy b. rising exchange rates, free movement of capital, and nationalist monetary policy c. predictable exchange rates, autonomous monetary policy, and protectionist trade policy d. protectionist trade policy, free movement of capital, and rising exchange rates