In the balance of payments, which of the following is TRUE of the sum of the capital account balance, the current account balance, and the official reserve transactions account balance?
A) This sum is either positive or negative, depending on whether the sum of all surplus and deficit items associated with cross-border transactions is positive or negative.
B) This sum must always be zero, because the sum of all surplus and deficit items associated with cross-border transactions must equal zero.
C) This sum is positive only if the U.S. government operates with a budget surplus.
D) This sum is positive only if the U.S. government operates with a budget deficit.
Answer: B
You might also like to view...
If Pareto efficiency has been achieved
A) there are no additional Pareto improvements that can be made. B) surplus is maximized. C) economic efficiency is also achieved. D) All of the above.
Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost for Canada is:
A. ½ pair of shoes for every 2 apples. B. 2 pairs of shoes for each apple. C. ½ apple for each pair of shoes. D. 2 apples for each pair of shoes.
Which one of the following states a central element of the economic way of thinking?
a. Scarce goods are priceless. b. Incentives matter--human choice is influenced in predictable ways by changes in personal costs and benefits. c. The realism of the assumptions is the best test of an economic theory. d. When deciding how to allocate time, the concept of opportunity cost is meaningless.
Recall the Application about the British experience with private water companies in the nineteenth century to answer the following question(s).Recall the Application. The British experience with water privatization showed that the distribution of water is:
A. a natural monopoly. B. best left as a deregulated market. C. best set up as a trust. D. a classic example of price fixing.