In a balance of payments statement, the current account plus the financial account must equal the capital account
Indicate whether the statement is true or false
FALSE
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What are two important properties of economic models? Models tend to be simplified descriptions of a real-world phenomenon. Does this mean that they are unrealistic?
What will be an ideal response?
Long-term contracts become longer:
A. when spot markets work well. B. when the exchange environment is more complex. C. when marginal costs are declining. D. when specialized investment becomes more important.
The price of one piece of pizza is $2 and the price of movies is $4. The consumer has $14 of income. The consumer is purchasing 3 pieces of pizza and receiving 20 utils for the last piece. He is also purchasing 2 movies and receiving 40 utils for the
last movie. This set of goods A) is an optimum since the entire income is spent and the marginal utility per dollar spent is the same for the last unit of each good. B) is an optimum since the entire income is spent and total utility is minimized. C) is not an optimum because the marginal utility per dollar spent is greater for pizza than for movies. D) is not an optimum because the consumer has not spent all of his money.
The person least likely to receive a payment from a corporation in a year of losses is the
A. bondholder. B. preferred stockholder. C. common stockholder. D. bank that loaned money to the corporation.