Government purchases, as a component of GDP include all except:
A. goods and services bought by all levels of government.
B. both consumption- and investment-type goods bought by the government.
C. include services the government pays for.
D. goods purchased by government from foreign countries.
D. goods purchased by government from foreign countries.
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Holding all else constant, an increase in the real interest rate on U.S. assets will ________ the demand for dollars in the foreign exchange market and ________ the equilibrium Mexican peso/U.S. dollar exchange rate.
A. increase; increase B. decrease; decrease C. increase; decrease D. decrease; increase
Trading partners should specialize in producing goods in accordance with comparative advantage, then trade and diversify in consumption because
a. out-of-pocket costs of production decline b. free trade areas protect infant industries c. economies of scale are present d. manufacturers face diminishing returns e. more goods are available for consumption
When a country imports more than it exports, it has a:
A. policy which forbids exportation. B. zero trade balance. C. trade deficit. D. trade surplus.
Between the years of 2001 and 2003, what happened to the structural deficit?
A. It declined rapidly. B. It fell steadily. C. It increased steadily. D. It remained fairly constant.