When a country runs a trade deficit,
a. it must be running a budget surplus.
b. its imports will become injections instead of leakages.
c. its exports will become leakages instead of injections.
d. foreigners will demand loanable funds from the country.
e. foreigners will supply loanable funds to the country equal to its trade deficit
E
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In a case where there are two possible work activities and two workers, which of the following is true regarding to comparative advantage?
a. One person can have a comparative advantage in both activities. b. Both people can have a comparative advantage in both activities. c. No one can have a comparative advantage in either activity. d. Each person must have a comparative advantage in one activity, but not both.
If the world price for good A is below the domestic price for good A without trade, then consumer surplus will ________ and producer surplus will ________ with trade.
A. decrease; decrease B. increase; decrease C. increase; increase D. decrease; increase
If a country wants to keep the domestic currency overvalued against a foreign currency:
A) it will buy both the foreign and domestic currency. B) it will sell both the foreign and domestic currency. C) it will buy the domestic currency and sell the foreign currency. D) it will buy the foreign currency and sell the domestic currency.
Reserves of banks appear on their balance sheet as liabilities
a. True b. False Indicate whether the statement is true or false