If a U.S. company imports 10 Toyotas from Japan at $15,000 each, and the Japanese company buys airline tickets on a U.S. airline with the money, how does this affect the U.S. balance of payments accounts?
A. No change in trade balance or financial account balance
B. Decline in financial account balance; increase in trade balance
C. Decline in trade balance; increase in financial account balance
D. Decline in trade balance; decrease in financial account balance
Answer: A
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Last year in a small economy, consumption spending was $12,000, investment spending was $3,500, government spending was $4, 000, exports were $1,150, and imports were $1,350. What was GDP for this economy last year?
What will be an ideal response?
Money as a medium of exchange I. Facilitates the exchange of goods II. Reduces the incentive to barter
A) I only B) II only C) Both I and II D) Neither I nor II
Opportunity cost is best defined as:
a. the sum of all alternatives given up when a choice is made. b. the money spent once a choice is made. c. the highest-valued alternative given up when a choice is made. d. the difference between the cost price and the selling price of a good. e. the cost of capital resources used in the production of additional capital.
Which of the following would impose the greatest costs to society?
a. high levels of expected inflation b. low levels of expected inflation c. variable rates of inflation d. stable rates of inflation