A country has a current account surplus if
A. the value of its net exports of services exceeds the value of its net exports of goods.
B. it receives more income from foreign assets than it pays to foreigners for foreign-owned domestic assets.
C. its capital inflows exceed its capital outflows.
D. the value of its exports exceeds the value of its imports, assuming net income from foreign assets and net unilateral transfers have a value of zero.
Answer: D
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Suppose shoppers typically pay twice as much for frozen "convenience" foods compared to similar dinners they could prepare themselves. An economist would say
A) the purchase is inefficient because the consumer doesn't really need to pay twice as much for essentially the same dinner. B) the purchase is inefficient because the frozen dinner is of even lower quality than the homemade dinner, yet twice as expensive. C) the purchase is efficient if the consumer feels the savings in preparation time justifies the higher price. D) the purchase is efficient, but the consumer is still probably behaving irrationally.
The year with the highest number of strikes was _________.
Fill in the blank(s) with the appropriate word(s).
To maintain a pegged rate, a nation faces a trilemma and must also:
A) generate extra export revenues. B) watch carefully to ensure imports and exports are equal. C) adjust its interest rates and money supply to ensure the home interest rate is equal to the foreign interest rate to prevent pressure on the exchange rate. D) restrict foreign capital inflows and domestic capital outflows.
Saving is a ________ concept and savings are a ________ concept.
A. flow; flow B. stock; stock C. stock; flow D. flow; stock