"If the official settlements balance is zero, a current account surplus implies an equal capital and financial account deficit." Is the previous statement correct or incorrect? Briefly explain your answer
What will be an ideal response?
The statement is correct. The sum of the current account balance plus the capital and financial account balance plus the official settlements account must equal zero. If the official settlements account balance is zero, then the sum of the current account balance plus the capital and financial account balance must equal zero. Therefore a current account surplus must be "balanced" by an equally-sized capital and financial account deficit.
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The quantity supplied by domestic producers in an importing country must be less than the quantity demanded by its population.
Answer the following statement true (T) or false (F)
Economic rent is paid only to land, and not to other resources.
Answer the following statement true (T) or false (F)
Compare and contrast the effects of a tariff on prices and national well-being imposed in a small country with the effects of a tariff imposed in a large country. Illustrate your answer with the help of suitable diagrams.
What will be an ideal response?
Because resources are limited:
A. only the very wealthy can get everything they want. B. firms will be forced out of business. C. the availability of goods will be limited but the availability of services will not. D. people must make choices.