A trade deficit can be financed by all of the following except
a. a surplus in the capital account.
b. a surplus in the official reserves transaction account.
c. selling U.S. assets to foreigners.
d. U.S. citizens buying foreign stocks and bonds.
D
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Suppose the government cuts taxes. We would expect interest rates to ________ and the dollar to ________ in foreign exchange markets
A) rise; depreciate B) fall; appreciate C) rise; appreciate D) fall; depreciate
An example of a deficit item on the U.S. balance of payments is
A) the sale of a spark plug made by a U.S. firm in Michigan to a Nissan plant in Tennessee. B) the purchase of Japanese yen by a U.S. firm. C) a deposit in a bank in Chicago by the government of Saudi Arabia. D) the payment of a dividend by a British firm to a U.S. family.
An increase in number of foreign immigrants allowed into the country who wish to work will:
A. increases labor demand. B. increases labor supply. C. decreases labor supply. D. decreases labor demand.
In country A the opportunity cost of 1 paper clip is:
If Countries A and B produce only either rubber bands or paper clips, their maximum outputs are shown in the production possibilities schedules below:
A. 2 rubber bands
B. 1 rubber band
C. 1/2 rubber band
D. 1/4 rubber band