28. Economists summarize a country\'s transactions with other countries with a(n

Question

28. Economists summarize a country's transactions with other countries with a(n) account A) circular-flow B) balance of payments C) exchange rate D) purchasing power parity 29. If fiscal policy is used to close an inflationary gap, the A) SRAS curve shifts leftward and the price level falls B) SRAS curve shifts rightward and the price level increases C) AD curve shifts rightward and the price level rises D) AD curve shifts leftward and the price level decreases 30. The problem of scarce resources A) B) C) D) means that in some cities there are not enough jobs. could be solved if the unemployment rate fell. is that there are not enough resources to satisfy people's unlimited wants. is that resources are used inefficiently 31. Which would be included in the U.S. financial account? A) computer made in the United States and exported to Britain B) computer made in Britain and imported into the United States C) interest on a U.S. company's bond sold to someone living overseas D) the value of a bond from a company in the United States sold to someone li Britain When the Federal Reserve buys Treasury bills, this leads to a(n): A) decrease in the money supply B) increase in the money supply. C) increase in short-term interest rates. D) increase in the Federal Reserve funds rate. 32.

Explanation / Answer

28. Option B
Balance of payments account represents the country’s inflows and outflows of transaction that happen through exports, services and capital.

29. Option C
The AD curve will shift to the right due to expansionary fiscal policy. It implies that there will general excess demand in the economy due to which in equilibrium price and output will rise.

30. option C
Scarce resources themselves imply that there aren’t enough resources that could satisfy unlimited human wants.

31. Option D
The value of a bond from a company in the United States sold to someone living in
Britain will be captured in US Fin account. Others won’t be captured in Fin account.

32. option B
When Fed buys T-bills, it releases cash in the economy. Hence, an increase in money supply will take place.

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