Suppose that Venezuela experiences significant capital outflows after a recent election. If the nation had flexible exchange rates, these flows would have had the following effect on the nation's financial account and reserves account
a. Financial account would rise and reserves account would fall.
b. Financial account would not change and reserves account would fall.
c. Financial account would fall and reserves account would not change.
d. Financial account would fall and reserves account would fall.
e. Financial account would fall and reserves account would rise.
.C
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Cindy's Sweaters' production function is shown in the above table. Cindy rents two knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. If Cindy produces 18 sweaters per day, what is her total cost?
A) $120 B) $140 C) $180 D) $60
The buying and selling of foreign currency by the central bank is a trade policy whose objective is:
A. reducing purchases of assets abroad. B. stabilizing the exchange rate against external shocks. C. stabilizing the interest rate against foreign capital outflows. D. promoting long term economic growth.