How are deficit and surplus items determined in the balance of payments?
What will be an ideal response?
Any transaction that leads to a payment by a country's residents or government is a deficit item and any transaction that leads to a receipt by a country's residents or government is a surplus item.
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Give an example of how money functions as a unit of account
What will be an ideal response?
Which of the following policies would reduce frictional unemployment?
A) implementing an unemployment insurance policy B) a decrease in the minimum wage C) a job retraining program D) building an online job database that helps workers find jobs
An increase in the riskiness of corporate bonds will ________ the yield on corporate bonds and ________ the yield on Treasury securities, everything else held constant
A) increase; increase B) reduce; reduce C) increase; reduce D) reduce; increase
One difference between a policy of direct spending by the government on research and development and an alternative policy of tax incentives to encourage private spending on R&D is ________
A) the former improves the productivity of R&D, while the latter raises its level B) the former requires a decrease in national saving, while the latter causes an increase C) the former raises the level of R&D spending, while the latter also improves its productivity D) the former requires an increase in national saving, while the latter causes a decrease