Suppose a German bank purchases a U.S. Treasury bond. This transaction would be recorded in the:
A. capital account.
B. current account.
C. goods trade balance.
D. unilateral transfers.
Answer: A
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If, at the point where MR = MC, the firm incurs losses, in the short run the firm should:
a. shut down. b. increase output. c. decrease output. d. continue at its current output if P > AVC. e. continue at its current output if P > ATC.
Two individuals engage in the same two productive activities. In which of the following circumstances would neither individual have a comparative advantage in either activity?
a. One individual's production possibilities frontier is steeper than the other individual's production possibilities frontier. b. One individual is faster at both activities than the other individual. c. One individual's opportunity costs are the same as the other individual's opportunity costs. d. None of the above is correct; one of the two individuals always will have a comparative advantage in at least one of the two activities.
If a person claims, "I wouldn't eat anchovies if you paid me," we can assume that his marginal utility of anchovies is
A. positive. B. positive, but decreasing. C. negative. D. zero.
Anti-globalization and protectionism are both arguments against free trade. How do these two arguments differ?
What will be an ideal response?