Which of the following would cause the current account to decrease?
A) an increase in the nominal exchange rate, E
B) an appreciation of the home currency
C) an increase in disposable income
D) an increase in foreign prices, P
E) a decrease in domestic prices, P
C
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For the money expansion process to produce the maximum potential multiplier effect
A) all loans of a given bank have to be deposited in that bank. B) the Fed has to sell government bonds to back up the loans. C) the required reserve ratio has to be 100 percent. D) all loans from banks have to be redeposited throughout the banking system.
Refer to the payoff matrix below. In reference to the Nash equilibrium/equilibria in this game, which of the following is true?
Camp with Us and Happy Campers compete in the market for campers. Each firm must decide each season if they are going to offer special financing or not. The above payoff matrix shows each firm's net economic profit at each pair of strategies.
A) There is one Nash equilibrium in this game.
B) There are two Nash equilibria in this game.
C) There are no Nash equilibria in this game.
D) There are three Nash equilibria in this game.
Which of the following is not a policy implication of the traditional model?
A. There is a potential role for government if there are positive externalities. B. For the most part, the government needs to stay out of people's way and let them trade. C. There is a potential role for government if there are negative externalities. D. The government should take moral and social incentives into account when considering intervention.
Jake, Sr. sells the family business, a factory that produces snake oil, to Jake, Jr., for $100, even though the factory has been assessed at $400,000. How will this transaction affect GDP?
A. Investment will increase by $100. B. GDP will not be affected by the transaction. C. Consumption will increase by $400,000. D. Investment will increase by $400,000.