A small open economy has a current account balance of zero. A rise in its investment demand causes
A) a current account surplus.
B) a financial account deficit.
C) income to exceed absorption.
D) net borrowing from abroad.
D
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If the bank of Waterloo receives a $10,000 deposit and the reserve requirement is 10 percent, how much can the bank loan out? (Assume that before the deposit this bank is just meeting its legal reserve requirement.)
A) $1,000 B) $9,000 C) $10,000 D) $11,000
Interest rates typically rise when
A. bond prices increase. B. bond prices decrease. C. the maturity date on existing bonds extends farther into the future. D. the coupon payout on existing bonds increase.
If price is above the equilibrium, there will be excess supply of the product.
Answer the following statement true (T) or false (F)
Capital, as a factor of production, refers to
A) the tools and instruments used to produce other goods and services. B) stocks and bonds, but not money. C) money, stocks, and bonds. D) the production technology used by firms. E) the production factors imported from abroad.