The U.S. balance of payments status may improve when
A. the inflation rate increases in the United States relative to other countries.
B. political instability in other countries increases.
C. the American government increases its spending on foreign aid.
D. the world demand for U.S. products falls.
Answer: B
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The four components of GDP are consumption expenditures, private investment expenditures, government purchases, and transfer payments.
Answer the following statement true (T) or false (F)
A key reason that actively managed funds have lower returns than index funds with a similar level of risk is that:
A. Index funds require more buying and selling to generate their returns B. Management and trading costs reduce the returns of actively managed funds C. Index funds spend more on research and management D. Diversification is more important to actively managed funds
Refer to Figure 5-3. If consumers paid the full price of medical services, the equilibrium quantity would be
A) 400. B) 800. C) 1,200. D) > 1,200.
If indifference curves and budget lines are used to analyze consumer choice, an inferior good will
a. escape detection when income rises. b. be easily identified because the quantity purchased will fall as income rises. c. be easily identified because the quantity purchased will rise as income rises. d. be easily identified because it will change the slope of the budget line. e. escape detection because this model does not show that relationship.