Which of the following would be a debit in the U.S. capital account?
A. A U.S. publisher purchases a copyright from a French author for $3,000.
B. A Chinese importer buys $10,000 of cigarettes from a U.S. manufacturer.
C. Egypt forgives $100,000 of debt owed by the U.S. government.
D. A U.S. corporation sells $50,000 of stock to investors in Japan.
Answer: A
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The idea of opportunity cost is relevant
A. only in consumption decisions. B. only in production decisions. C. only in financial decisions. D. in almost any kind of decision.
If the FOMC orders the sale of T-bills in the open market, then bank reserves are
a. decreased, but the money supply will remain unchanged. b. decreased, and a multiple contraction of the money supply will occur. c. increased, but the money supply will remain unchanged. d. increased, and a multiple expansion of the money supply will occur.
"Trade restrictions such as tariffs and quotas are like a blockade that a nation imposes on its own people." Is this statement true?
A) Yes, both the trade restrictions and a blockade will reduce the gains from specialization and trade. B) No, a blockade will help the residents of a nation achieve a higher income level; trade restrictions will not. C) No, trade restrictions will help the residents of a nation achieve a higher income level; a blockade will not. D) Uncertain, the statement is true if the gains of the residents exceed those of foreigners; otherwise it is false.
In the simple circular flow model, total income in one nation must equal
A. the sum of wages, rents, interest and profits. B. the yearly amount earned by that nation's resources. C. the total monetary value of all final goods and services. D. All of these are correct.