How are the following transactions entered into the U.S. balance of payments?
(a) The U.S. government sends $2,000 worth of food aid to Africa.
(b) A U.S. firm exports $10,000 worth of goods to the United Kingdom, payable in 3 months.
(c) A U.S. tourist in Amsterdam spends $200 for food and hotels.
(a) The United States debits unilateral transfers for $2,000 and credits merchandise exports, also in its current account, for $2,000.
(b) The United States credits merchandise in its current account for $10,000 and debits its short-term capital account for $10,000.
(c) The United States debits the service category (travel) of its current account for $200, and credits its capital account (an increase in foreign holdings of U.S. assets or claims on the United States) for $200.
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The term investment refers, in general, to
A) any action today that has costs today. B) any action today that has costs today but provides expected benefits in the future. C) only large projects, such as building a new factory, undertaken by private firms. D) only the creation of capital goods undertaken by private firms or the government.
"The percentage change in quantity demanded divided by the percentage change in price" represents
A) the law of demand. B) the law of one price. C) the price elasticity of demand. D) the responsiveness of consumers to a change in quantity demanded. E) none of the above.
Using the Keynesian model, the effect of a government-imposed ceiling on interest rates paid on personal checking accounts that is lower than the current market interest rate would be to cause ________ in the real interest rate and ________ in output
in the short run. A) a decrease; a decrease B) a decrease; no change C) a decrease; an increase D) an increase; a decrease
As a group, U.S. consumers view hamburger as a normal good at low income levels and as an inferior good at high income levels. Based on this information, which of the following statements is NOT true?
A) As income for all consumers rises, the hamburger demand curves of low-income consumers shift rightward, and the demand curves of high-income consumers shift leftward. B) The aggregate demand curve for hamburger in the U.S. is upward sloping at low prices. C) The Engel curve for hamburger consumed in the U.S. is upward sloping at low income levels and downward sloping at high income levels. D) The income-consumption curve for hamburger and all other food products cannot be a straight line.