In the balance of payments, financial transactions include all
a. transactions in which money changes hands.
b. flows of financial investments between nations.
c. net deficit items.
d. net surplus items.
b. flows of financial investments between nations.
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A decline in interest rates tends to expand the economy by
A. encouraging private investment and decrease in bank lending. B. appreciating the currency and lowering the profitability criterion for investments. C. decreasing the cost of capital and reducing net exports. D. depreciating the currency and raising net exports.
Consider the game known as the Prisoner's Dilemma. What's the dilemma?
a. By both not confessing, both get to the cooperative solution and minimize time in prison. b. By both confessing, both get to the noncooperative solution and both serve significant time in prison. c. As a group, they are better off cooperating by not confessing, but each player has an incentive to be first to confess in a double cross. d. The problem is that the spies should never have been caught; they should move to Rio.
The type of security that is protected against inflation are:
A. Treasury bonds. B. Treasury notes. C. TIPS. D. Treasury bills.
As a general rule, if pollution costs are external, firms will produce
a. too little of a polluting good. b. too much of a polluting good. c. an optimal amount of a polluting good. d. cannot be determined without additional information.