A credit item in the balance of payments is

A. any imported item.
B. any loan given out by the country.
C. an item for which the country must be paid.
D. an item that creates a monetary claim owed to a foreigner.


Answer: C

Economics

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Suppose the IRS were to introduce a tax exemption for portion of interest income earned on corporate bonds. This would

A) reduce the user cost of capital. B) raise the marginal product capital. C) raise the rate of depreciation. D) All of the above are correct.

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Which of the following is true when regulators require a natural monopolist to set price equal to marginal cost?

a. This policy results in a less than socially optimal allocation of resources. b. The marginal cost of producing the last unit sold exceeds the consumers' marginal value for that last unit. c. The monopolist will face recurring losses unless a subsidy is provided. d. The monopolist will earn a normal profit. e. The monopolist will earn more than a fair return.

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At a price above the breakeven point of a perfectly competitive firm, the firm will suffer losses in the short run

a. True b. False Indicate whether the statement is true or false

Economics

Demand is said to be elastic when:

A. the percentage change in the amount demanded is smaller than the percentage change in price. B. the demand curve is relatively flat. C. the elasticity of demand is less than -1. D. the elasticity of demand is greater than -1.

Economics