Suppose that when the price of ice cream increases, Liza decreases her purchase of hot fudge. To Liza,
A) ice cream and hot fudge and substitutes.
B) ice cream is a normal good and hot fudge is an inferior good.
C) ice cream and hot fudge are normal goods.
D) ice cream and hot fudge are complements.
D
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When a foreign investor buys a bond issued in the United States,
A) the balance on the financial account increases. B) the balance of trade increases. C) the balance on the current account increases. D) the balance on the capital account increases.
The following are government activities that are involved in public finance, except:
A. Providing public goods and services such as national defense and education B. Running government-owned enterprises such as hospitals, utilities, and lotteries C. Redistributing income through various taxes and income-transfer payments D. Regulating the activities of firms in the financial sector of the economy