Which of the following is an item in the U.S. capital account?
A. exports of services
B. the change in private U.S. assets abroad
C. net transfer payments
D. net investment income
Answer: D
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Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $1, what changes in the market would result in an economically efficient output?
A) The price would increase, the demand would increase, and the supply would decrease. B) The quantity supplied would increase, the quantity demanded would decrease, and the equilibrium price would increase. C) The price would increase, the quantity supplied would increase, and the quantity demanded would decrease. D) The price would increase, quantity demanded would increase, and quantity supplied would decrease.
Borrowing from abroad represents:
A) a capital outflow. B) a capital inflow. C) positive net savings. D) none of the above.
If labor-intensive textile products could be produced more cheaply in low-wage countries than in the United States, the United States would gain if it
a. levied a tariff on the goods produced by the cheap foreign labor. b. subsidized the domestic textile industry so it could compete in international markets. c. used its resources to produce other items while importing textiles from foreigners. d. levied a tax on the domestic textile products to penalize the industry for inefficiency.
The value of a firm is
A. the price for which the firm can be sold minus the present value of the expected future profits. B. larger the higher is the risk premium used to compute the firm's value. C. smaller the higher is the risk premium used to compute the firm's value. D. both b and c