If the balance on the current account is zero, which of the following transactions will cause it to go into deficit?
a. The Moscow Capital Investment Corporation makes a loan to a US firm
b. A US subsidiary exports raw materials to its French parent company
c. US firms and individuals receive dividends on US investments in Latin America
d. US tourists in Great Britain purchase pounds sterling
e. Foreigners purchase US securities
Answer: d. US tourists in Great Britain purchase pounds sterling
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Business cycles are the result of
A) regular shifts of the AD curve only. B) irregular shifts of the SAS curve only. C) regular shifts of both the AD and SAS curves. D) irregular shifts of both the AD and SAS curves.
When offered a bet at fair odds, a risk-neutral individual
a. accepts the bet if it is sufficiently small. b. always wagers everything on one outcome or the other. c. is indifferent about the amount that he bets. d. chooses a risk-free basket of outcomes.
According to supply-side economists, government regulation of factor markets, such as OSHA,
A. Decreases production costs and causes AS to decrease. B. Increases production costs and causes AS to decrease. C. Increases production costs and causes AS to increase. D. Decreases production costs and causes AS to increase.
___________ is the study of how people behave in strategic situations.
A. Game theory B. Administered prices C. Price leadership D. Kinked demanded