A country can have a trade deficit as long as it can:
A. produce more than it consumes.
B. borrow from or sell assets to foreigners.
C. purchase foreign assets.
D. make loans to other countries.
Answer: B
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Answer the following statements true (T) or false (F)
1) If your firm has a random demand, producing at the level that maximizes your expected profit will earn the same profit as the profit-maximizing production level with a known demand. 2) If a firm's demand is random, the firm's price and profit are also random. 3) If a perfectly competitive firm has a random demand and known marginal cost, producing at a level that sets expected price equal to marginal cost minimizes the reduction in expected profit. 4) If a firm's demand is known, but has random costs, it cannot maximize its actual profit. 5) When both demand and cost are random, firms cannot maximize expected profit.
Which of the following is the situation in which a nation shifts its international trade from nations outside a regional trade bloc to nations within the bloc?
A) trade diversion B) trade deflection C) trade retention D) protectionism
The slope of a typical production possibilities frontier reflects the fact that
a. some systems of market organization are more efficient than others. b. the invisible hand always functions smoothly in a market system without government intervention. c. when resources are allocated efficiently, it's impossible to produce more of anything without producing less of something else. d. production is only possible when resources are allocated efficiently.
The value of the marginal product of any input is equal to the marginal product of that input multiplied by the
a. wage. b. marginal cost of the output. c. change in total profit. d. market price of the output.