Suppose that net exports are greater than zero. If the capital account is in balance, ________.
A. there is a reserve account surplus
B. there is a current account surplus
C. the sum of the reserve account and the financial account must be zero
D. there is a financial account surplus
Answer: B
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If the absolute value of the price elasticity of demand for DVD movies is 0.8 then the elasticity of demand of the DVD for the movie The Hangover should be
A) less then 0.8 in absolute value. B) equal to zero because the DVD of this movie has been out for several years. C) equal to 1 in absolute value. D) greater than 0.8 in absolute value.
Refer to the information provided in Table 23.3 below to answer the question(s) that follow. Table 23.3
Refer to Table 23.3. Society's MPS is
A. 0.2. B. 0.25. C. 0.7. D. 0.8.
If the Fed conducts an open market purchase of Treasury bonds, this will
A) encourage banks to make more loans and will increase the money supply. B) encourage banks to make more loans and will decrease the money supply. C) cause banks to reduce their loans and will increase the money supply. D) cause banks to reduce their loans and will decrease the money supply.
Cashews and asparagus are normal goods. When the price of asparagus falls, the substitution effect by itself causes
a. the consumer to feel richer, so the consumer buys more cashews. b. the consumer to feel richer, so the consumer buys less cashews. c. cashews to be relatively more expensive, so the consumer buys less cashews. d. cashews to be relatively less expensive, so the consumer buys more cashews.