A circular flow diagram traces the flows of inputs and outputs between:
A. households and the government.
B. households and firms.
C. households in one country and households in another country.
D. firms in one country and households in another country.
Ans: B. households and firms.
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Refer to Table 9-12. Which country has a comparative advantage in producing swords?
A) Estonia B) Morocco C) both countries D) neither country
An increase in the domestic real interest rate will tend to cause, other things the same ________
A) a depreciation of the domestic currency B) an increase in the demand for domestic goods and services C) an increase in demand for foreign currencies D) an appreciation of the domestic currency
Every international transaction recorded in the balance of payments has both a credit item and a debit item. In the case of a U.S. foreign aid, a debit in the balance of payments, what is the offsetting credit? Explain.
What will be an ideal response?
Which of the following actions could be undertaken if the government wants to reduce a recessionary gap?
A. Increase taxes more than the amount of reduction in government spending. B. Increase taxes and reduce government spending. C. Increase taxes and increase government spending. D. Reduce taxes and increase government spending.