Suppose Japan is currently running a current account surplus. The most effective way of eliminating this current account surplus would be to temporarily ________ government purchases and ________ the domestic money supply.
A. increase; increase
B. increase; decrease
C. decrease; decrease
D. decrease; increase
Answer: A
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Refer to Table 9-12. If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded, how many belts will Morocco gain compared to the "without trade" numbers?
A) 0 B) 10 C) 50 D) 60
Which would be a liability on a balance sheet of a commercial bank?
a. An outstanding commercial loan b. A U.S. Treasury bond c. A certificate of deposit issued by the bank d. Vault cash e. None of the above
Which of the following terms is used to describe a situation in which the price of an asset rises above what appears to be its fundamental value?
a. "random walk"
b. "random bubble"
c. "speculative bubble"
d. "speculative hedge"
Assume leisure is a normal good. The substitution effect of a wage decrease implies a ________ demand for leisure and a ________ labor supply.
A. higher; higher B. higher; lower C. lower; lower D. lower; higher