Every transaction concerning the importation of goods into the United States constitutes a
A) supply of foreign currency with no effect on the market for the dollar.
B) demand for dollars with no effect on markets for foreign currencies.
C) supply of foreign currencies and a demand for dollars.
D) demand for foreign currencies and a supply of dollars.
Answer: D
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Governments prefer to avoid excessive current account surpluses because
A) the returns to domestic savings are more difficult to tax than those on assets abroad. B) an addition to the home capital stock may increase domestic unemployment and therefore lead to higher national income. C) foreign investment in one firm may have beneficial technological spillover effects on other foreign producers that the investing firm does not capture. D) an addition to the home capital stock may reduce domestic unemployment and therefore lead to higher national income. E) domestic savings increase with more investment abroad.
If producers believe that the increase in their relative prices is small relative to the increase in the general price level, then the slope of the short-run aggregate supply curve will be
A) zero. B) small. C) large. D) negative.
A cable company can add a subscriber for ________ and a market failure occurs because the price charged ________
A) nearly zero marginal cost; exceeds marginal cost B) less than average cost; reduces consumer surplus C) nearly zero marginal cost; is extortionist D) average variable cost; increases producer surplus
In China prior to 1990, most residential buildings were dilapidated because:
a. people were not aware of maintenance and beautification techniques. b. the government did not encourage wastage of resources for such purposes. c. no one had a property right to a home. d. all the properties were inherited. e. the people had private property rights so they did not have an incentive to repair the houses.