Distinguish between the balance of payments and the balance of trade
What will be an ideal response?
The balance of payments is a summary record of a country's economic transactions with foreign residents and governments over a year. As such, it takes into consideration all types of transactions. The balance of trade refers only to the value to goods and services bought and sold in the world market. The balance of trade makes up a portion of the balance of payments.
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One major assumption of economics is that people
A) act as if they systematically pursue self-interest. B) behave randomly without any predictable pattern. C) are sometimes rational and sometimes irrational. D) always pursue the interests of others.
An economic slowdown in Europe is likely to lead to a(n):
a. decrease in U.S. exports and U.S. aggregate demand. b. increase in U.S. exports and U.S. aggregate demand. c. decrease in U.S. imports and U.S. aggregate demand. d. increase in U.S. imports and U.S. aggregate demand.
If a budget deficit as a percent of GDP is greater than the growth of real output, the national debt will
a. decrease relative to the size of the economy. b. decrease in nominal terms. c. increase in nominal terms but decrease relative to the size of the economy. d. increase relative to the size of the economy.
Sam Lewis owns a firm in New York City's Garment District. If Sam keeps adding workers to use the same number of sewing machines, eventually the workplace will become so crowded that workers will get in each other's way. At this point
A) the marginal product of labor in Sam's business would be negative and his total output would decrease. B) Sam should encourage his workers to share their sewing machines. C) Sam's business will be in violation of safety rules that have been established by the New York City government. D) Sam should begin using a division of labor in his business.