Every international transaction recorded in the balance of payments has both a credit item and a debit item. In the case of a U.S. foreign aid, a debit in the balance of payments, what is the offsetting credit? Explain.
What will be an ideal response?
POSSIBLE RESPONSE: Often the foreign aid is in the form of goods and/or services delivered to the country. The foreign aid might be agricultural products, equipment, sending personnel, etc. So, in the case of a U.S. foreign aid, the offsetting credit item is usually an export item (exports of goods and services).
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Can economic theory prove national restrictions on international trade will reduce global welfare?
A) No, but it can demonstrate that they will reduce the welfare of the nations that impose the restrictions. B) No, but it can demonstrate that they reduce efficiency. C) No, but it can predict which groups will be made worse off or better off. D) Yes, if welfare is defined as economic welfare.
Suppose that Colleen's nominal wage rate was $20 per hour in 1998, the base year for the CPI. If the CPI in 2003 was 120.0 and her nominal wage had risen to $22 per hour, what was her real wage in 2003?
a. $16.67 b. $18.33 c. $22.00 d. $26.40 e. her real wage for 2003 cannot be determined with the information given