All of the following are examples of spending on goods and services in the circular flow model except
A) Giovani buys a new cell phone to replace the one he flushed down the toilet.
B) Amir buys a new humidor for his cigar shop.
C) Isabella buys the sushi plate for lunch at the Turning Japanese Sushi Bar.
D) Vijay buys a new minivan for his family's cross-country vacation.
Answer: B
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There can be an opportunity for covered interest arbitrage if:
a. the interest rate is low and the exchange rate is high. b. the forward/spot rate difference is either larger or smaller in percentage terms than the difference in the interest rates on two currencies. c. there is a time lag on the settlement of the transactions. d. the interest rate is high and the exchange rate is low.
Under a gold standard, a balance of payments deficit automatically
a. raised interest rates. b. decreased exports. c. increased domestic prices. d. increased imports.