What is the difference between imports and exports?
What will be an ideal response?
Imports are goods and services bought domestically but produced in other countries.
Exports are goods and services produced domestically but sold in other countries.
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Which of the following transactions would take place in the "underground economy"?
A) Matt bought an iPad for $499 but decided to sell it on eBay instead of keeping it. B) Elizabeth tells her mother she's going to work but really goes to see a movie. C) Paul buys 15 gallons of gasoline for $3.29 a gallon, not realizing that $1.50 per gallon of that price goes to the government as tax revenue. D) John makes chain-link belts and necklaces and sells them at a local flea market for cash to avoid paying taxes.
Understanding the potential for tradeoffs between ________ is an important consideration when designing poverty policy.
A. the rich and the poor B. the old and the young C. equity and efficiency D. All of these are true.
Free exit implies that
A. a perfectly competitive firm can never earn a profit. B. the government regulates the number of firms it allows in an industry. C. firms will always earn below normal profit, as firms can exit the industry at any time they like. D. if an industry's existing firms make excessively high losses, firms are likely to exit the industry.
Which of the following statements about the balance of payments accounts is CORRECT?
A) The current account must be greater than the capital and financial account. B) The sum of all three accounts is always zero. C) The official settlements account is typically larger than both the capital and financial account and the current account. D) Typically the capital and financial account is near zero because it equals the difference between the current account and the official settlements account.