Suppose that a consumer is at an optimum consuming X and Y. If the price of X falls, then to get to a new equilibrium the consumer must
A) purchase less X and more Y.
B) purchase less Y and less X.
C) purchase more X.
D) purchase more Y.
Ans: C) purchase more X.
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If the United States donates footballs to Japan, how is the transaction recorded on the U.S. balance of payments accounts?
A) Decline in merchandise trade; increase in financial account B) Decline in financial account; increase in merchandise trade C) Decline in net unilateral transfers; increase in merchandise trade D) Decline in merchandise trade; increase in net unilateral transfers
Probability
A) is a number between 0 and 1, inclusive. B) indicates how likely an outcome is to occur. C) is larger the more likely the event is to occur. D) All of the above.
A society allocates its scarce resources to various uses. These scarce resources include
a. land. b. people. c. machines. d. All of the above are correct.
The total rate of return on an international asset is the:
a. spot rate plus the forward rate. b. rate of return on the asset plus or minus the expected capital gain or loss on currency changes. c. rate of return on the asset minus commissions. d. rate of return plus inflation minus taxes.