Differentiate between the current account balance and the capital account balance
The current account balance includes international purchases and sales of goods and services, cross-border interest and dividend payments, and cross-border gifts to and from both private individuals and governments. The capital account balance includes purchases and sales of financial assets to and from citizens and companies of other countries.
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Pollution is an example of a
A) negative externality B) positive externality. C) private cost. D) public good.
Bond holders:
A. lose when actual inflation equals expected inflation. B. do not lose when the expected inflation built into the nominal interest rate is lower than actual inflation. C. gain when actual inflation is more than was expected. D. do not lose when the expected inflation built into the nominal interest rate is correct.
The figure below shows the market for MP3 players in a small country. Dd and Sd are the domestic demand and domestic supply curves of the MP3 players. QQ is the quota quantity. According to the figure, if import licenses are allocated based on a resource-using procedure, the loss to the economy will be
A. less than $10 million. B. $35 million. C. greater than $35 million. D. $25 million.
The nominal interest rate is 7% and the real interest rate is 2.75%. What is the inflation rate?
A) 3.75% B) 4.55% C) 4.25% D) 9.75%