Why is the balance of payments always zero?
What will be an ideal response?
If a country spends more on goods and services and other items in the current account than it receives, it must have received the income needed to buy those items from investments from foreigners. In other words, a current account deficit must be offset by a surplus in the financial account. Apart from measurement errors, the sum of the current account and the financial account must equal zero. Therefore, the balance of payments must also equal zero.
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The relationship between the inputs employed by a firm and the maximum output it can produce with those inputs is called the firm's
A) total factor productivity. B) marginal production level. C) technological ratio. D) production function.
Economic analysis indicates that
a. unorganized groups of taxpayers and consumers will be better able to secure redistribution through the political process than well-organized interest groups. b. rent-seeking activities are beneficial to a nation's prosperity because they alter public policy. c. most income transfers in the United States are directed toward the poor. d. market adjustments and competition for transfers will erode much of the gain of transfer recipients.
Which of the following is not a characteristic of an assurance game?
A) Neither player has a dominant strategy. B) Nash equilibria exist at every outcome where the players successfully coordinate. C) Each of the Nash equilibria offers identical payoffs to any particular player. D) The payoff for coordinating is higher than the payoff for not coordinating.
A market structure in which many firms are selling an identical product is called
A) perfect competition. B) monopolistic competition. C) oligopoly. D) monopoly.