U.S. imports are considered:
a. a credit or plus item in the U.S. balance of payments.
b. a credit or minus item in the U.S. balance of payments.
c. a debit or plus item in the U.S. balance of payments.
d. a debit or minus item in the U.S. balance of payments.
d
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Economics is called an empirical science because
A) economists study real-world evidence to test their models. B) economists use assumptions in their models. C) economic models have no predictive power. D) economic analysis is only useful in a capitalistic society.
Suppose your donut shop earns $20,000 in total revenues per month with explicit costs of $15,000 and opportunity costs of $5,000. Your economic profit is
A) $16,000. B) $12,000. C) $5,000. D) zero.
Suppose two goods (x and y) are being produced efficiently and that the production of x is always more labor intensive than the production of y. Production depends only on two factors (capital and labor); these may be smoothly substituted for each other. The total quantities of these inputs are fixed. An increase in the production of x and a decrease in the production of y will:
a. increase the capital-labor ratio in each firm. b. decrease the capital-labor ratio in each firm. c. leave the capital-labor ratio for each firm unchanged. d. increase the capital-labor ratio in y production and decrease the capital-labor ratio in x production.
Augi sells 300 cat toys each month when the price is $5 per toy. When Augi lowered the price to $4, she sold 400 toys. The price elasticity of demand over the $4 to $5 range is approximately:
A. 0.78 and inelastic. B. 1.29 and inelastic. C. 1.29 and elastic. D. 0.78 and elastic.