What effect does the following transaction have on the U.S. balance of payments?(Choose the proper debit and credit entries.)The U.S. Federal Reserve intervenes to puchase euros in the foreign exchange market
a. Debit the U.S. financial account; credit the U.S. financialaccount.
b. Credit the U.S. financial account; debit the U.S. financialaccount.
c. Debit the U.S. financial account; credit the U.S. current account.
d. Credit the U.S. financial account; debit the U.S. current account.
.B
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Answer the following statement(s) true (T) or false (F)
1. A competitive firm will exit an industry in the long run if the market price falls below the firm's break-even price. 2. For a competitive firm with a downward sloping marginal cost curve, the supply curve and the marginal cost curve look exactly the same 3. There is no reason for a competitive firm to stay in business if it is making zero economic profit. 4. A decrease in firms’ variable costs will cause the output of the market to decrease. 5. A technological advance that reduces firms’ variable costs will lead to higher profits in the long run of a perfectly competitive industry.
Which of the following statements correctly identifies a reason why inflation can be used as a countercyclical policy tool?
A) Inflation sometimes increases the demand for workers that increases output and helps combat slowdowns. B) Inflation reduces money costs and hence stimulates an economy during slowdowns. C) Inflation increases consumer demand which is necessary for combating slowdowns. D) Inflation increases consumer confidence, which is an absolute necessity to counter act business cycles.
"Banks hold 100 percent of their customers' deposits as reserves." Is the previous statement correct or not?
What will be an ideal response?
Which of the following is true?
a. Real GDP is a measure of income, but not output. b. Real GDP is a measure of output, but not income. c. Real GDP is a measure of inflation. d. Growth of output is necessary for the growth of income.