A net capital inflow occurs in open economies where investment is:
A. higher than national savings.
B. equal to national savings.
C. lower than national savings.
D. higher than national spending.
Answer: A
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If bond prices decrease, then the
A. transactions demand for money will decrease. B. interest rate increases. C. interest rate decreases. D. transactions demand for money will increase.
An example of a seasonally unemployed worker would be
A) a day care provider who quits his job to go back to school. B) a mother who quits her job to stay home with her children. C) a General Motors employee loses her job because the company is downsizing its work force. D) a software engineer who is laid off because of declining demand for the software he writes. E) a ski lift operator who loses his job when the snow melts in the spring.
Suppose a country with a large domestic textile industry removed all tariffs on imported textiles, we would expect domestic:
a. textile prices to decline. b. textile production to increase. c. textile employment to increase. d. textile prices to rise.
Answer the following questions:
a. What is the difference between gross domestic product and gross national product? b. Give an example of a transaction that would be counted in GDP but not in GNP. c. Give an example of a transaction that would be counted in GNP but not GDP.