What does a current account deficit do that is positive for a nation?
What will be an ideal response?
The deficit enables more investment in the economy and investment increases living standards. Capital inflows, in general, indicate foreign confidence in the domestic economy.
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The fact that assets of the political opponents of the U.S. were frozen in U.S. banks
A) was challenged as unconstitutional. B) lead to an increased amount of funds being placed in Eurobanks. C) lead to a violation of the Law of One Price. D) lead to the Cold War. E) lead to a violation of Regulation Q.
If the demand for a product is said to be relatively inelastic, the "absolute" value of the elasticity coefficient will be
A) less than one. B) greater than one. C) equal to one. D) zero.
A technological advance in the production of the first good increases the opportunity cost of the first good in terms of the second good
a. True b. False Indicate whether the statement is true or false
Coordination problems have led to the failure of command systems. Which of the following best exemplifies this problem?
A. Command economies try to minimize the use of capital goods, making production less efficient. B. Managers had no incentive to address market surpluses or shortages, as long as they met production goals. C. Workers were not motivated to work hard because of a lack of consumer goods to purchase. D. The complexity of production processes made it difficult to assure that all necessary inputs were provided at the right time and in the right amount.