If a nation’s balance of payments is always in balance, why isn’t it also always in equilibrium?
What will be an ideal response?
Official bank reserves are drawn upon to settle net differences in current account and capital and financial account balances so that the balance of payments is brought into balance. However, the change in the status of official reserves represents a disequilibrium in the balance of payments. Official reserves are needed to accommodate the difference in these cases.
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Which of the following is an example of a positive economic statement?
a. The economy's real output increased at about 3 percent last year and the unemployment rate decreased. b. A central bank should not print too much money because inflation could result. c. Congress should stabilize the social security system by raising taxes now. d. The government farm products surplus should be distributed to the needy.
A GDP price chain price index number of 120.0 for a given year indicates that prices in that year are 20 percent higher than prices in the base year
a. True b. False Indicate whether the statement is true or false
Recall the Application about the merger of Sirius Satellite Radio and XM Satellite Radio to answer the following question(s).Recall the Application. What were the tradeoffs that government regulators had to consider in determining whether to allow Sirius and XM to merge?
What will be an ideal response?
Suppose Adam Einberg pays $100 for a ticket to a new Broadway play and $100 was the maximum price he was willing to pay. On the day of the performance of the play Adam refuses to sell the ticket for $150. How would behavioral economists explain Adam's
refusal to sell his ticket? A) Adam's tastes had changed from the time he bought the ticket to the time of the performance of the play. B) When Adam bought the ticket he was being unrealistic about his future behavior. C) The endowment effect explains Adam's actions. People like Adam seem to value things that they have more than the things they do not have. D) Adam's income probably increased between the time he bought the ticket and the day of the play's performance.