If the United States donates footballs to Japan, how is the transaction recorded on the U.S. balance of payments accounts?
A) Decline in merchandise trade; increase in financial account
B) Decline in financial account; increase in merchandise trade
C) Decline in net unilateral transfers; increase in merchandise trade
D) Decline in merchandise trade; increase in net unilateral transfers
C
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Refer to the graph below. Suppose that its shows the S and D graphs in a market where production entails a significant amount of pollution. In this case, the government should use its coercive power to make:
A. The supply curve shift to the left
B. The supply curve shift to the right
C. The demand curve shift to the left
D. The demand curve shift to the right
If the output gap equals 1.8 percent, then:
A. there is significant cyclical unemployment. B. cyclical unemployment equals the sum of structural and frictional unemployment. C. there is an expansionary gap. D. potential GDP exceeds actual GDP.