Which of the following is a deficit item on the balance of payments?
A) exports of merchandise
B) foreign tourist dollars spent domestically
C) sales of gold to foreigners
D) purchases of foreign assets
Answer: D
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During the Iraq War, the U.S. government continued to borrow funds and yet the interest rate was steady or slightly declined. What could explain this?
A) The U.S. crowded out private saving. B) The U.S. crowded out private borrowing. C) The supply of loanable funds increased by a greater proportion than demand increased. D) The supply of loanable funds increased by a smaller proportion than demand increased.
"Saving" refers to ____ while "savings" refers to ____
a. a stock concept; a flow concept b. how much is saved within a certain time period; accumulated assets c. a stock concept; accumulated assets d. how much is saved within a certain time period; a flow concept
If home prices are falling, consumers purchasing a home will find their purchasing power of money has increased. This benefit to consumers is called the:
A. inflation effect. B. wealth effect. C. home equity effect. D. multiplier effect.
A downward shift in the Fed's policy reaction function corresponds to a ________ the aggregate demand curve and a decrease in exogenous spending corresponds to a ________ the aggregate demand curve.
A. movement up; shift right of B. shift left of; movement up C. shift right of; shift left of D. shift left of; shift right of