When a U.S. oil company purchases oil from Saudi Arabia and the Saudi Arabian firm uses the proceeds from the sale to buy transportation services from the U.S., U.S. net exports ________ and the capital inflow to the United States ________.
A. are negative; is negative
B. are unchanged; is unchanged
C. are negative; is positive
D. are positive; is negative
Answer: B
You might also like to view...
The above figure shows the market for rice in Japan. SDomestic represents the domestic supply curve, and Sworld represents the world supply curve. If imported rice is banned, the loss in social welfare is
A) a + b + c + d + i + j. B) a. C) c + e. D) a + b + c + d.
Regarding unemployment, the classical model implies that
A) unemployment always exists. B) unemployment cannot exist. C) voluntary unemployment is zero, but involuntary unemployment often is fairly high. D) only voluntary unemployment exists.
When a lack of information exists for parties to a deal:
A. it is always worth getting more information before making a decision. B. the cost of acquiring information sometimes is prohibitive and not worth it. C. an exchange will never happen. D. the exchange will always happen anyway, with little chance of maximizing surplus.
If General Electric finds that when it doubles both its plant size and the amount of associated inputs, its output level does not double, then
a. the law of diminishing returns is in effect. b. long-run average costs must be decreasing. c. the firm is experiencing diseconomies of scale. d. the firm should increase production. e. the firm is experiencing constant returns to scale.