The three major parts of the balance of payments are:
a. Current account, capital account, and statistical discrepancy account.
b. Current account, capital account, and financial account.
c. Balance of trade, financial account, and reserves account.
d. Balance on goods and services, reserves account, and statistical discrepancy account.
e. Current account, capital account, and balance on goods and services.
.B
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Fiat money is money backed by
a. gold owned by the government. b. a commodity held by the government. c. trust in the government issuing it. d. bartering between consumers.
As the interest rate increases, what happens to the present value of a future payment? Explain why changes in the interest rate will lead to changes in the quantity of loanable funds demanded and investment spending
The existence of money in an economy promotes efficiency by
A) facilitating trade, thereby allowing for greater specialization. B) allowing for the formation of corporations as legal entities. C) creating incentives to be self-sufficient. D) creating an equal distribution of income.
Refer to the scenario above. Which of the following problems is most likely to arise in this case?
A) Adverse selection B) Moral hazard C) The tragedy of the commons D) The free-rider problem