Which of the following is a deficit item on the U.S. balance of payments accounts?
A) A U.S. firm sells a product to a Mexican firm.
B) An Italian tourist in Miami purchases a beach ball.
C) A Spaniard buys 100 shares of Ford stock.
D) A U.S. resident buys gold from the Japanese central bank.
D
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Everything else held constant, in the market for reserves, when the federal funds rate equals the interest rate paid on excess reserves, raising the interest rate paid on excess reserves
A) increases the federal funds rate. B) lowers the federal funds rate. C) has no effect on the federal funds rate. D) has an indeterminate effect of the federal funds rate.
Though many assets can be used as a store of value, money is a particularly attractive method to store value because:
a. it increases in value as prices rise. b. its purchasing power does not decline when prices rise. c. it is the most liquid of all assets. d. it is backed by gold.
One cause of market failure may be the absence of clearly defined property rights
a. True b. False Indicate whether the statement is true or false
If the real interest rate were -7%, this is:
a. A clear sign that it is better to borrow than to lend. b. Not clear sign that it is better to borrow than to lend because this decision depends on expected inflation. c. Actually, it is impossible for the real interest rate to be -7% because the real interest rate can approach zero, but it can never be less than zero. d. A clear sign that it is better to lend than to borrow.