In the 1980s, the U.S. current account deficit was financed by:
a. large outflows of domestic capital to other countries.
b. large inflows of capital from private foreign investment in the United States.
c. loans made by U.S. residents to the government.
d. large inflows of foreign government capital.
e. the Tax Reform Act of 1986, which increased income taxes for the wealthy.
b
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When a deadweight loss occurs in a market, we can be certain that
A) taxes have been imposed in a market. B) the market is a monopoly. C) there underproduction in the market. D) the entire society experiences a loss.
All economic models must involve simplifications because
a. economists would be unable to command high salaries if their models were so simple that anyone could understand them b. human behavior is very erratic and unpredictable c. reality is too complex to understand in its entirety, so we must reduce it to a level that we can understand d. they always try to duplicate all possible information and cover all possible variables that might influence decision making e. we must rely on value judgments and ignore reality
Banks are firms who are in business, like butchers, bakers, and candlestick makers, to make profit. They accept deposits from savers and use those deposits to make loans to borrowers. The profit they make is
a. their excess reserves, remaining in the bank after loans are made b. regulated by the FDIC c. regulated by the Federal Reserve System d. the difference between the interest rate they pay to their borrowers and the interest rate they charge to their depositors e. the difference between the interest rate they pay to their depositors and the interest rate they charge to their borrowers
Susan is trying to decide whether to quit her $20,000 per year job so she can return to college next year. If she goes to college next year, her books and supplies will cost $500, tuition will cost $3,000, and her other expenses (transportation, housing, and food) will increase by $2,000. What is Susan's opportunity cost of attending college next year? Select one:
a. $3,000 b. $3,500 c. $5,500 d. $25,500