Suppose that Bill, a resident of the U.S., buys software from a company in Japan. Explain why and in what directions this changes U.S. net exports and U.S. net capital outflow
The purchase of a foreign good by a U.S. resident is a U.S. import. Since net exports = exports - imports, net exports decrease. Bill pays for the software with U.S. dollars so the Japanese have obtained more U.S. assets. Since, net capital outflow = the amount of foreign assets acquired by domestic residents - domestic assets acquired by foreign residents, the increase in foreign holdings of dollars by Japanese residents decreases U.S. net capital outflow.
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Keynes argued that when interest rates were low relative to some normal value, people would expect bond prices to ________ so the quantity of money demanded would ________
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
Its lunch time, you are hungry and would like to have some pizza. By the law of diminishing marginal value,
a. you would pay more for your first slice of pizza than your second b. you would pay more for your second slice of pizza than your first c. you would pay an equal amount of money for both the slices since they are identical d. none of the above
Figure 7-5
Which of the curves in Figure 7-5 could be a firm's average fixed cost curve?
a.
(a)
b.
(b)
c.
(c)
d.
(d)
When applying the marginal principle, you should pick the level at which the activity's marginal benefit is less than its marginal cost.
Answer the following statement true (T) or false (F)