The current account balance consists of
A. net exports of goods and services, minus net unilateral transfers.
B. net exports of goods and services, plus net income from abroad, plus net unilateral transfers, minus the financial account balance.
C. net exports of goods and services, plus net income from abroad, plus net unilateral transfers.
D. the trade balance plus the services balance.
Answer: C
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In a two-country framework, if the opportunity cost of producing a good is equal in both countries, _____
a. trade will favor the country with better technology b. trade is not possible between the countries c. trade will be equally beneficial to both the countries d. trade will favor the country with a greater labor force
What is the assumption underlying public-choice theory?
A. Resources in the public sector are not scarce. B. Individuals act within the political process to improve their own individual well-being. C. Elected officials believe in cooperating with one another and they seek to avoid competition among themselves. D. The costs and benefits of being efficient are the same whether one is in the private sector or in the public sector.
Refer to the figure above. Calculate the total surplus after the government imposes a tariff of $1 per unit
A) $160 B) $240 C) $300 D) $315
Discretionary fiscal policy is best defined as:
a. the deliberate change in tax laws and government spending to change equilibrium income. b. the deliberate manipulation of the money supply to expand the economy. c. the arbitrary fluctuation in tax laws and budget requirements. d. the automatic change in certain fiscal instruments when real GDP changes. e. the policy action taken by the Congress to reduce the federal budget deficit.