Use the U.S. current account balance and international investment position to explain the relationship between the current account balance and the international investment position
What will be an ideal response?
For many years, the U.S. international investment position was positive. The large current account deficits of the 1980s, 1990s, and 2000s have eroded the United States' investment position from a positive $288.6 billion in 1983 to zero in 1989, and negative since then. Each year a country experiences a current account deficit, foreigners acquire more assets inside its boundaries than its residents acquire abroad, and the international investment position shrinks further. Thus a current account deficit in a given year does not imply that the international investment position is negative, but sustained current account deficits must eventually lead to a negative international investment position.
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Minimum wages create unemployment in markets where they create a
a. shortage of labor. Minimum wage laws are not the predominant reason for unemployment in the U.S. b. shortage of labor. Minimum wage laws are the predominant reason for unemployment in the U.S. c. surplus of labor. Minimum wage laws are not the predominant reason for unemployment in the U.S. d. surplus of labor. Minimum wage laws are the predominant reason for unemployment in the U.S.
The value of final output produced in a given period, measured in current prices, is
A. GNP. B. Real GDP. C. Nominal GDP. D. NDP.
One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired. B. prices tend to adjust more quickly downward than upward. C. wages are sticky downward. D. input prices increase with output prices.
Answer the following questions true (T) or false (F)
1. A surplus occurs when the actual selling price is above the market equilibrium price. 2. A competitive market equilibrium is a market equilibrium with many buyers and sellers. 3. In response to a shortage, the market price of a good will rise. As the price rises, the demand will decrease and supply will increase until equilibrium is reached.