Answer the following statements true (T) or false (F)
1. In the balance of payments statement, a current account deficit is always matched by a capital and financial accounts surplus.
2. When a nation is experiencing a balance-of-payments deficit, its treasury or central bank will engage in a net sale of its official reserves.
3. The purchase of a foreign hotel by a U.S. company is recorded as a credit in the financial account of the U.S. balance-of-payments statement.
4. In the dollar/yen market, if the supply of yen increases other things being equal, the dollar will appreciate.
5. Relatively high rates of U.S. inflation compared to other countries will increase the supply of, and decrease the demand for, dollars in foreign exchange markets.
1. T
2. T
3. F
4. T
5. T
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A supply curve shows
A) the marginal cost of producing one more unit of a good or service. B) the marginal benefit from buying one more unit of a good or service. C) the quantities sold at different prices. D) the total cost of producing different quantities of a good or service.
Which of the following activities undertaken by a competitive firm can improve its public relations?
a. Investing in assets that cannot easily be redeployed to other uses or locations. b. Donating a portion of its annual profit to hurricane affected families c. Providing good quality products at a high price. d. Investing in in-house research
Marginal cost is:
a) Total revenue minus total cost. b) The change in total costs because of a one-unit increase in output. c) Total cost divided by the rate of output. d) The average profit divided by the quantity sold.
In the long run, if government increases spending ________
A) interest rates decrease B) it crowds out private investment C) saving increases D) all of the above E) none of the above