The United States' balance of payments is likely to improve when
A. there is an increase in political instability in other countries.
B. American people want to invest more in foreign countries.
C. the American government increases its spending on foreign aid.
D. the inflation rate in the United States rises relative to other countries.
Answer: A
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Based on the table above which shows Chip's costs, if rice sells for $600 a ton, Chip will
A) shut down because he incurs an economic loss. B) shut down because the price is below his minimum average variable cost. C) stay open because he makes an economic profit. D) stay open because the price is above his minimum average variable cost.
Proponents of fixed exchange rates argue that the predictability of the fixed exchange rate:
A. allows monetary policy to be used to stabilize the domestic economy. B. decreases trade and economic integration. C. increases trade and economic integration. D. prevents exchange rate overvaluation.