The current account is
A. an accounting statement that includes all spending flows across a nation's border, including the purchase of assets.
B. an accounting statement that includes all spending flows across a nation's border for the purchase of goods and services.
C. equal to value of a country's exports.
D. equal to value of a country's imports.
Ans: B. an accounting statement that includes all spending flows across a nation's border for the purchase of goods and services.
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A firm experiencing constant returns to scale operates on the horizontal part of the:
a. long-run average total cost curve. b. marginal cost curve. c. marginal product curve. d. total product curve.
The Treasury usually requires most businesses to regularly deposit taxes withheld from employees into accounts at designated commercial banks. On a regular basis, the funds in these accounts are transferred to the Treasury's account at the Fed. Discuss what is happening to the balance sheet of the banking system as the businesses are making deposits and these tax accounts are increasing. What happens to the banking system's balance sheet when the funds are transferred to the Fed?
What will be an ideal response?