If there is a deficit in the financial accounts, ________.
A. the sum of the capital account and the current account must be less than zero
B. the sum of the reserve account and capital account must be zero
C. the sum of the current account and the reserve account must be greater than zero
D. the sum of the current account, reserve account, and capital account must be zero
Answer: A
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Where do economic agents such as individuals, firms, and nations interact with each other?
A) in any arena that brings together buyers and sellers B) in any location where transactions can be monitored by consumer groups and taxed by the government C) in any physical location where people can physically get together for selling goods, such as shopping malls D) in public locations monitored by the government
Alexa keeps $500 readily accessible in her checking account so that she can take advantage of changes in the prices of other financial assets. This illustrates the
A) speculative demand for money. B) transfer demand for money. C) precautionary demand for money. D) transactions demand for money.
Which of the following is not a market failure?
A. A lack of competition in some markets. B. Prices determined in competitive markets, which consumers, as individuals, have no control over. C. The presence of externalities in some markets. D. A lack of public goods desired by a majority of citizens.
When the anticipated rate of inflation is 2 percent and the real rate of interest is 4 percent, the nominal rate of interest is
A) 0 percent. B) 1 percent. C) 2 percent. D) 6 percent.