When the government increases the level of official reserves by $50 million, the change is recorded in the
A) capital and financial account.
B) current account.
C) official settlements account.
D) official reserves account.
E) foreign currency account.
C
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On a graph we draw a consumer's budget constraint, measuring the number of apples on the horizontal axis and the number of light bulbs on the vertical axis. If the slope of the budget constraint is -2, then
a. an apple costs twice as much as a light bulb. b. the opportunity cost of a light bulb is 2 apples. c. the opportunity cost of an apple is one-half of a light bulb. d. All of the above are correct.
Visitors to a country hosting a world soccer tournament purchase food, souvenirs, and accommodations while attending the tournament. Which of the following should these expenditures raise?
a. The host country's net exports and its net capital outflow b. The host country's net exports but not its net capital outflow. c. The host country's net capital outflow but nor its net exports. d. Neither the host country's net exports not its net capital outflow.
If the demand for bacon is relatively elastic, a 10 percent decline in the price of bacon will:
A. decrease the amount demanded by more than 10 percent. B. increase the amount demanded by more than 10 percent. C. decrease the amount demanded by less than 10 percent. D. increase the amount demanded by less than 10 percent.
There are two coal-burning electrical utilities—one in tiny, rural Wanunu, Montana, and another in metropolitan Detroit, Michigan—and each produces the same amount of pollution per unit of output. If a permit tax is going to be used to force these
firms to internalize pollution costs, the tax levied should be A) the same in each city. B) higher in Wanunu than in Detroit. C) higher in Detroit than in Wanunu. D) less than zero in each city.