For a government to be efficient, a project should be funded up to
A. MB = 0.
B. MB = ~
C. MC = 0.
D. MC = ? .
E. MB = MC.
E. MB = MC.
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Payments by the government to the public for which the government receives no current goods or services in return are called:
A. transfer payments. B. net taxes. C. public saving. D. capital losses.
Suppose Honda purchases a car factory in the United States. This purchase is entered into which of the balance of payments accounts?
A) business purchases account B) current account C) capital and financial account D) trade account E) official settlements account
An essential assumption of the Cournot model is that each firm aims to maximize profits, based on the expectation that its own output decision will not have an effect on the decisions of its rivals. Critically evaluate this assumption
What will be an ideal response?
Under flexible exchange rate, the response of an economy to a temporary fall in foreign demand for its exports is
A) the currency appreciates, and output falls. B) the currency depreciates, and output falls. C) the currency depreciates, and output increases. D) the currency depreciates, and output remains constant. E) the currency appreciates, and output increases.