A British investor buys $40,000 worth of stocks in the U.S. stock market. For the U.S. we would predict ________.
A. the balance of trade will increase
B. the balance of trade will decrease
C. the effect on the balance of trade will depend on how the capital account changes
D. the balance of trade will not change
Answer: C
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Over a short-run period (i.e., week or month), ________ dominate exchange rate movements
A) short-run inflation differentials B) nominal price changes C) relative price changes D) None of the above
Which of the following is NOT one of the economic problems that the "New Economy" is alleged to have solved?
A) deflation B) slow growth in productivity C) the budget deficit D) business cycle
In economic analysis, air pollution, water pollution, and scenery destruction are considered to be
A) externalities. B) internalities. C) private costs. D) marginal benefits.
All of the following are examples of government purchases except
a. F-15 fighter planes b. food and clothing for the armed forces c. interstate highways d. post offices e. the Washington D.C. residence of Illinois Senator Richard Durbin