A painter pays $500 for paint he uses to repaint a house. He then presents a bill for $1200 that covers his time and expenses to the homeowner. How much do these transactions add to GDP?
a. $500
b. $700
c. $1200
d. $1700
c
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A country's financial account balance decreases if
A) its current account balance increases. B) its income payment inflows on foreign assets decrease. C) its domestic residents working abroad reduce the income they send home to their families. D) foreigners increase their purchases of its existing assets.
Steel producers in the United States observe that foreign sales of U.S. steel has drastically declined due to stringent trade policies adopted by the foreign governments and unfair treatment of U.S. steel exports in foreign countries. The lobbying efforts of such loss making U.S. steel manufacturers induces the domestic government to restrict the entry of imported steel and help stimulate the
sales of domestically produced steel. Which of the following is most similar to the example mentioned above? a. A tariff imposed by the government to stimulate domestic production of a high-technology good with positive spillover effects b. A tariff imposed by the government on the import of cotton textiles because it is an infant industry in the domestic country c. An import tariff applied against a foreign monopoly supplying the domestic market d. Taxes imposed by the government on an import competing industry that generates a negative production externality e. Reciprocal tariffs introduced by the government of Mexico on tobacco imports from Brazil in retaliation to unfair treatment of Mexican tobacco exports to the latter
The theory of consumer choice
a. underlies the concept of the demand for a particular good.
b. underlies the concept of the supply of a particular good.
c. ignores, for the sake of simplicity, the trade-offs that consumers face.
d. can be applied to many questions about household decisions, but it cannot be applied to questions concerning wages and labor supply.
Chris pays $10,000 for a newly issued two-year government bond with a $10,000 face value and a 6 percent coupon rate. One year later, after receiving the first coupon payment, Chris sells the bond. If the current one-year interest rate on government bonds is 7 percent, then the price Chris receives is:
A. less than $10,000. B. greater than $10,000. C. $700. D. $10,000.