The sum of the current account, the capital account, and the official reserve transaction account is
A. positive when exports are greater than imports.
B. always positive.
C. always negative.
D. zero.
Answer: D
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If the marginal propensity to consume of an economy is 0.7, then the simple spending multiplier is:
a. 3.3. b. 0.3. c. 1.3. d. 1.
The calculators of a price index use a “bundle” or “basket” of representative goods and services. What tradeoff are they making in this calculation?
a. ethics for monetary gain b. logic for relevance c. accuracy for convenience d. tradition for innovation
In a capitalist market economy, the decision to save is made by the same people who make the major investment decisions.
Answer the following statement true (T) or false (F)
In a market economy:
A. collective decision-making is more important than individual decision-making. B. goods and services are distributed as if by an "invisible hand" to those who can not afford them. C. profit provides an incentive to be productive. D. the distribution of wealth is equitably distributed.