What are the three categories of transactions in the balance of payments? Give an example of each
The current account includes records of trade of goods and services, investment income, and unilateral transfers. The purchase of American machinery by a foreign firm is recorded here. The capital account records changes in the ownership of real and financial assets. The sale of IBM stock to a foreign investor is recorded here. The official reserve account records changes in currency holdings of the central bank. If the United States reduces its currency holdings by supplying foreign currency to the foreign exchange market, this transaction is recorded in the official reserve account.
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A possible advantage of a horizontal merger for the economy is that
A) the government stands to collect more corporate income tax revenue. B) the merged firm might reap economies of scale which could translate into lower prices. C) the merging firms could avoid losses. D) the degree of competition in the industry will be intensified.
The purchase of VCU2 by Tomas Tiergarten, a private resident, causes the nation's:
a. Monetary base to fall. b. M2 money supply to fall. c. M2 money multiplier to remain the same. d. M2 money supply to rise.
Suppose there is a policy debate regarding the United States’ imposing trade restrictions on imported ball bearings.
Domestic producers of ball bearings send a lobbyist to the U.S. government to request that the government impose trade restrictions on imports of ball bearings. The lobbyist claims that the U.S. ball-bearing industry is new and cannot currently compete with foreign firms. However, if trade restrictions were temporarily imposed on ball bearings, the domestic ball-bearing industry could mature and adjust and would eventually be able to compete in the world market. Which of the following justifications is the lobbyist using to argue for the trade restriction on ball bearings? A. Jobs argument B. National-security argument C. Unfair-competition argument D. Infant-industry argument E. Using-protection-as-a-bargaining-chip argument
After a price ceiling of $8 is placed on the market in the graph shown, which area represents producer surplus?
A. A + C + E B. C + D + F + G C. C + D + E D. E