The Mexican peso crisis of 1994 and 1995 was directly related to
A) the start of NAFTA.
B) a large capital account surplus.
C) a large capital account deficit.
D) an undervalued peso.
E) a large current account surplus.
B
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As U.S. real GDP falls, poorer households may decide to buy ________ foreign goods and assets, which would cause a(n) ________ of the U.S. dollar.
A. fewer; appreciation B. more; appreciation C. fewer; depreciation D. more; depreciation
The term capital consumption allowance is defined as:
a. the amount of net interest in an economy each year. b. the estimated value of depreciation and obsolescence in investment goods. c. the difference between exports and imports. d. the disposition of disposable personal income. e. the difference between earnings not received and receipts not earned.
If Japan can produce each unit of steel using fewer resources than Canada uses,
a. Canada has an absolute advantage in steel production b. Japan has a comparative advantage in steel production c. Canada has a comparative advantage in steel production d. Canada may have an absolute advantage in producing steel e. Japan has an absolute advantage in steel production
The government buys new weapons systems. The manufacturers of weapons pay their employees. The employees spend this money on goods and services. The firms from which the employees buy the goods and services pay their employees. This sequence of events illustrates
a. the accelerator effect. b. the multiplier effect. c. the chain effect. d. the bandwagon effect.