A. purchases more stocks and bonds from the rest of the world than it sells
B. purchases more goods from the rest of the world than it sells
C. sells more goods to the rest of the world than it purchases
D. sells more stocks and bonds to the rest of the world than it purchases
Related Mcqs:
- Which approach predicts that is an economy operates a full employment and faces trade deficit currency devaluation will improve the trade balance only if domestic spending is cut thus freeing resources to produce exports ?
A. the absorption approaches
B. the Marshall Lerner approach
C. the monetary approach
D. the elasticities approach - When free trade areas are set up the member countries trade with each other grows faster than their trade with other countries This is due to what economist call ?
A. trade diversion
B. trade channeling
C. trade creation and trade diversion
D. trade creation - Assume that Country A is relatively abundant in labor and Country B is relatively abundant in land Note that wages are the returns to labor and rents are the returns to land According to the factor price equalization theorem, once Country A begins specializing according to comparative advantage and trading with Country B: A. wages and rents should fall in Country A B. wages and rents should rise in Country A C. wages should rise and rents should fall in Country A D. wages should fall and rents should raise in Country A ?
XA. wages and rents should fall in Country A
B. wages and rents should rise in Country A
C. wages should rise and rents should fall in Country A
D. wages should fall and rents should raise in Country A - Trade creation will more likely outweigh trade diversion for Country X that forms a customs union if the level of tariffs in Country X prior to the customs union is ________ and the total number of countries forming the customs union is _________?
A. relatively high; relatively large
B. relatively high; relatively small
C. relatively low ; relatively large
D. relatively low ; relatively small - How is termed equal rights of trade of trade without giving monopolies or preferences to an individual country ?
A. Open door market
B. Open door country
C. Open sky market
D. Free economy - A current account deficit means that a country may ?
A. reduce its stock of foreign assets
B. increase its stock of foreign assets
C. increases its savings
D. increases its foreign currency reserves - Under a pegged exchange rate system which does not explain why a country would have a balance of payments deficit ?
A. very high rates of inflation occur domestically
B. foreigners discriminate against domestic products
C. technological advance is superior abroad
D. the domestic currency is undervalued relative to other currencies - A capital account surplus might be expected to cause a current account deficit because the associated ?
A. capital outflow would cause the nation’s currency to depreciate contributing to a trade deficit
B. capital inflow would cause the nation’s currency to depreciate contributing to a trade deficit
C. capital inflow would cause the nation’s currency to appreciate contributing to a trade deficit
D. capital outflow would cause the nation’s currency to appreciate contributing to a trade deficit - A nation wishing to reduce its current account deficit would be advised to ?
A. engage in more government spending
B. reduce government taxes
C. increases private investment spending
D. decrease domestic consumption - A nation will a current account deficit will be ?
A. lending more money to other nations
B. experiencing a surplus in exports of goods an services
C. reducing its indebtedness to other nations
D. going further into debt with other nations
