A country seeking to maintain internal balance would be concerned
A) only with attaining low levels of unemployment.
B) primarily with ensuring that saving is weighted more towards domestic investment than the current account.
C) with large fluctuations in output or prices.
D) with maintaining an adequate stock of gold reserves.
E) with stabilizing employment levels globally.
C
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The profit-maximizing manager of Big Farms wants to purchase a large piece of farm equipment. The manager has two financing options from two different banks. Big Bank will allow the manager to make five equal payments of $22,000 at the end of each of the next five years. Best Bank will allow the manager to make a payment of $10,000 at the end of the next four years and then make a balloon payment
of $72,000 at the end of the fifth year. If the interest rate is 4 percent, which of the following statements is true? A) The manager of Big Farms should select Big Bank's offer because the total repayment is less than the total repayment at Best Bank. B) The manager of Big Farms should select Big Bank's offer as the present value of the payment plan is $97,939.60, which is lower than the payment plan offered by Best Bank. C) The manager of Big Farms should select Best Bank's offer as the present value of the payment plan is $95,477.75, which is lower than the payment plan offered by Big Bank. D) The present value of the two payment plans is exactly the same, so the manager of Big Farms is indifferent between the two payment plans.
If a country's current account balance is zero and the financial payments flowing in and out of the country's economy are equal, then which of the following must be a true statement?
a. It has an overall or net inflow of financial investment. b. It is not an overall or a net investor in other countries. c. It has an overall or net outflow of financial investment. d. Its government is not indebted to other governments.
Refer to the graph shown. An effective price floor at Pf causes consumer surplus to:
A. change from areas A + B + E to areas A + B + C. B. fall from areas C + D + F to area D. C. fall from areas A + B + E to area A. D. change from areas C + D + F to areas B + C + D.
The market demand curve
a. is found by vertically adding the individual demand curves. b. slopes upward. c. represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good. d. represents the sum of the quantities demanded by all the buyers at each price of the good.