Which of the following transactions would not be included in the current account of the home country?
A) A consumer good is imported into the home country.
B) A home country resident makes a deposit in a foreign bank.
C) A foreign student pays tuition to a university in the home country.
D) A home country resident receives income on his or her foreign assets.
B
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The demand curve is constructed with a
A. positive slope, because as more is purchased of a good, the cost of producing it rises. B. positive slope, because as buyers have more money, the more of a particular good will be purchased. C. negative slope, because when people purchase more of a good, the cost to produce that good falls. D. negative slope, because with everything else equal, buyers will purchase more of a good when its price is lower. E. positive slope, because as the price rises, people want to sell more of the good.
In the figure above, suppose the price of a pound of pecans is negatively related to the quantity of peanuts that farmers are willing to supply. If the price of pecans increases,
A) the curve will shift rightward. B) the curve will shift leftward. C) there is a movement along the curve. D) the curve will be unaffected. E) None of the above answers is correct because the graph assumes that the price of pecans does not change.
If the Fed buys $10 million of government securities when the desired reserve ratio is 20 percent and the currency drain ratio is 5 percent, the quantity of money
A) increases by $42 million. B) increases by $50 million. C) decreases by $42 million. D) decreases by $50 million. E) increases by $7.5 million.
Public sector investment projects are economically justifiable only when:
a. the discounted social benefits exceed the discounted social costs b. the internal rate of return exceeds the social discount rate c. the benefit-cost ratio exceeds zero d. a and b only e. a, b, and c