If a French company exports $2 million of machinery to Italy and French tourists spend $2 million at Italian beaches, the Italian current account balance ________, and the Italian financial account balance ________.
A. rises; is unchanged
B. is unchanged; rises
C. is unchanged; is unchanged
D. rises; rises
Answer: C
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Economists define the labor force to include
A) people who are working. B) only people who are working full time. C) people who are not working but are actively looking for a job, and people who are working. D) all individuals of working age, regardless of whether they are working or looking for a job.
Governments can use subsidies ________
A) as a means of increasing government spending B) when they want to increase taxes C) to achieve an efficient outcome if there are external costs D) to achieve an efficient outcome if there are external benefits
According to new growth theory, technological advances can be promoted
A) from within the economy. B) if only the right fiscal and monetary policies are in place. C) in a few rare cases. D) through industrial policy. E) none of the above
Import quotas have a negative impact on poor nations because they make it difficult for poor nations to
A. Receive foreign aid from rich nations. B. Sell agricultural goods to each other. C. Sell agricultural goods to rich nations. D. Develop a pro-business environment.