Which of the following represents a problem with the Chinese yuan becoming a reserve currency?
a. China does not have a large economy.
b. China does not have an open financial market.
c. China holds too many dollars.
d. The yuan is not currently part of the SDR.
Answer: b. China does not have an open financial market.
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In the figure above, firms
A) pay taxes directly to governments. B) sell goods and services to governments in goods markets. C) receive transfers from governments through factor markets. D) own factors of production. E) do all of the above.
Why do people often tend to take risks if they are insured?
What will be an ideal response?
Net exports equals the balance of trade surplus
Indicate whether the statement is true or false
From 2001 to 2004 the U.S. budget went from surplus to deficit. According to the open economy macroeconomic model, this change should have
a. increased U.S. interest rates and increased the real exchange rate of the dollar. b. increased U.S. interest rates and decreased the real exchange rate of the dollar. c. decreased U.S. interest rates and increased the real exchange rate of the dollar. d. decreased U.S. interest rates and decreased the real exchange rate of the dollar.