A country has a trade surplus when
A. its exports exceed its imports.
B. its government spending exceeds its tax revenues.
C. its exports equal its imports.
D. its exports are less than its imports.
Answer: A
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The relationship that says that the forward premium or discount is equal to the interest differential is
A) interest rate parity. B) purchasing power parity. C) the Fisher equation. D) the term structure of interest rates.
Used car dealerships add nothing to GDP because the cars they sell were already recorded in GDP when they were new
a. True b. False
Different points along a downward-sloping demand curve come from
A. tangencies between indifference curves and budget lines that represent different prices of the good. B. tangencies between indifference curves and budget lines that represent different income levels. C. different points along any one budget line when the prices of the goods are held constant. D. different points along any one indifference curve when the prices of the goods are held constant.
Demand for a good is inelastic if:
A. the quantity effect outweighs the price effect of a price increase. B. total revenue decreases when price increases. C. total revenue increases when price increases. D. the absolute value of price elasticity is greater than 1.