Answer the following statements true (T) or false (F)
1. Imports and exports are examples of financial flows.
2. When a U.S. firm purchases a Hungarian metal plant, this is an example of a capital resource flow.
3. In terms of combined volume of imports and exports, China was the world's leading trading nation in 2012.
4. A trade deficit occurs when government spending exceeds tax revenues.
5. One leading export of the United States is agricultural products.
1. F
2. F
3. F
4. F
5. T
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An unregulated monopoly finds that its marginal cost exceeds its marginal revenue. In order to increase its profit, the firm will
A) raise its price and decrease its output. B) lower its price and increase its output. C) raise its price and increase its output. D) continue to produce this level of output because any change will lower its profit.
Amy can produce either 5,000 pounds of cheese or 20 cars per year. Mike can produce either 5,000 pounds of cheese or 10 cars per year. By the principle of comparative advantage, Amy should specialize in producing
A. both cheese and cars. B. cheese. C. neither cheese nor cars. D. cars.