When the dollar value of a country's imports of final products exceeds the dollar value of its exports, the country has a
A. balance of trade deficit.
B. balance of payments surplus.
C. balance of trade surplus.
D. balance of payments deficit.
A. balance of trade deficit.
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Why does diversification fail to reduce risk when the returns of the two investments purchased are perfectly positively correlated?
What will be an ideal response?
The rule for efficient output selection is stated as MC = MU. Explain how the rule results in economic efficiency.
What will be an ideal response?
Investment in
a. physical capital, unlike investment in human capital, has an opportunity cost. b. physical capital, like investment in human capital, has an opportunity cost. c. human capital is particularly attractive because it involves no externalities. d. human capital has been shown to be relatively unimportant, relative to investment in physical capital, for a country's long-run economic success.
Economists assume that the goal of a firm is to
A. sell as many units as possible. B. maximize gross revenues. C. maximize economic profits. D. be the largest firm in its industry.