The balance of payments ____________
a. is always zero
b. is always one
c. is positive when the nation has a trade surplus
d. is negative when the nation has a trade deficit
e. is positive when the nation has a trade deficit
A
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Why does the Fed attempt to achieve a low, stable rate of inflation rather than an inflation rate of 0%?
What will be an ideal response?
People:
A. always have access to complete information. B. rarely have access to complete information. C. never have access to complete information. D. often have access to complete information.
Because an increase in the nominal interest rate raises the opportunity costs of holding money, the money demand curve:
A. shifts to the right. B. slopes downward. C. shifts to the left. D. slopes upward.
Suppose the required reserve ratio is 0.20. Total bank deposits are $200 million and the bank holds $50 million in reserves. How much more money could the bank create if it does not hold excess reserves?
A. $25 million B. $50 million C. $5 million D. $30 million