A market in which national currencies are traded by households, firms and governments, is referred to as a(n)
A) foreign exchange market.
B) fed funds market.
C) international reserves market.
D) gold certificate market.
A
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The GDP gap is:
a. the product of the potential real GDP and the equilibrium level of real GDP. b. the distance between the current level of real gross domestic product and full employment real GDP. c. the difference between potential real GDP and the equilibrium level of real GDP. d. the difference between the present value of all of government's projected financial obligations and the present value of all projected future tax and other receipts. e. the difference between the actual output of an economy and its potential output.
Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and real GDP in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period falls, and real GDP falls. b. The quantity of real loanable funds per time period and real GDP remain the same. c. There is not enough information to determine what happens to these two macroeconomic variables. d. The quantity of real loanable funds per time period rises, and real GDP remains the same. e. The quantity of real loanable funds per time period rises, and real GDP rises.
Which of the following represents an uninsurable risk to a business firm?
A. The possibility that its warehouse will burn down. B. The possibility that several of its workers will be injured at work. C. The possibility that an adverse change in consumer tastes will decrease the demand for the firm's product. D. The possibility that a tornado will damage the plant and stop production for a month.
Investment, as defined in national income accounts, would include:
A. government construction of new highways and dams. B. personal consumption expenditures on durable goods. C. purchases of shares of stock in corporate businesses. D. additions to business inventories.