If the United States has a trade deficit, this means that
A. Trade activity is limited to just a few goods.
B. The trade balance is negative.
C. Exports exceed imports.
D. The U.S. economy produces more than it consumes.
Answer: B
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In a given market, how are the equilibrium price and the market-clearing price related?
a. There is no relationship. b. They are the same price. c. The market-clearing price exceeds the equilibrium price. d. The equilibrium price exceeds the market-clearing price.
What are Properties of Money?
Suppose there are only two goods: food and clothing. What does it mean for the U.S. to have a comparative advantage in food production?
a. The U.S. needs fewer resources to grow a given amount of food than do other nations. b. The U.S. sacrifices less clothing production to grow a given amount of food than do other nations. c. In the U.S., food production needs fewer resources than does a comparable amount of clothing production. d. In the U.S., food production costs less than does clothing production.
If financial markets were perfect, financial intermediaries would
A) be illegal. B) handle roughly half of all finance. C) be the conduit of all finance. D) probably not exist.