Someone in Mexico has just ordered a U.S.-made automobile to be exported to Mexico. In the U.S. balance of payments, this purchase is a(n)
A. special draw.
B. surplus item.
C. accounting identity.
D. deficit item.
Answer: B
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As wealth increases in the economy, we would expect to observe
A) bond prices and interest rates both rise. B) bond prices and interest rates both fall. C) bond prices rise and interest rates fall. D) bond prices fall and interest rates rise.
A natural region over which a single currency dominates as a medium of exchange is called
A) sovereign nation. B) monetary union area. C) common currency area. D) currency union.
To eliminate built-in inflation from the economy, the Fed must
a. announce its intention to have a single policy objective b. create a recession c. maintain a constant rate of inflation d. resist the temptation to change its interest rate targets e. work closely with Congress and the President
Your boss gives you an increase in the number of dollars you earn per hour. This increase in pay makes
a. your nominal wage increase. If your nominal wage rose by a greater percentage than the price level, then your real wage also increased. b. your nominal wage increase. If your nominal wage rose by a greater percentage than the price level, then your real wage decreased. c. your real wage increase. If your real wage rose by a greater percentage than the price level, then your nominal wage also increased. d. your real wage decrease. If your real wage rose by a greater percentage than the price level, then your nominal wage decreased.