Consider a large open economy that has a zero current account balance. What are the effects on the world real interest rate, national saving, investment, and the current account balance in equilibrium if(a)future income rises?(b)business taxes decline?(c)government purchases decline?(d)the future marginal product of capital declines?
What will be an ideal response?
| (a) | rw rises, S falls, I falls, CA falls. |
| (b) | rw rises, S rises, I rises, CA falls. |
| (c) | rw falls, S rises, I rises, CA rises. |
| (d) | rw falls, S falls, I falls, CA rises. |
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The demand for loanable funds has a ________ slope because the lower the interest rate, the ________ number of investment projects are profitable, and the ________ the quantity of loanable funds demanded
A) negative; greater; greater B) negative; lesser; greater C) negative; greater; lesser D) positive; lesser; lesser
The major provisions of the Competitive Equality Banking Act of 1987 include
A) expanding the responsibilities of the FDIC, which is now the sole administrator of the federal deposit insurance system. B) the establishment of the Resolution Trust Corporation to manage and resolve insolvent thrifts placed in conservatorship or receivership. C) directing the Federal Home Loan Bank Board to continue to pursue regulatory forbearance. D) prompt corrective action when a bank gets in trouble.
Which of the following statements about the perfect competitor is INCORRECT?
A) The perfectly competitive firm is always a price taker. B) The perfect competitor sells a homogeneous commodity. C) If an individual firm raises price, it will lose business. D) The products made by a perfectly competitive firm have no close substitutes.
Suppose Embryonica is an LDC with few skilled workers, a primitive banking system, and very little electric power. What do we know for sure that Embryonica is lacking?
a. Infrastructure. b. Political stability. c. Agricultural sector. d. Traditional values. e. Poverty.