Under a flexible exchange rate system, the rate that equates demand and supply in the exchange rate market also equates the
a. value of the nation's merchandise exports with the value of its merchandise imports.
b. value of the nation's purchases of goods, services, and assets from foreigners with the value of the nation's sales of these items to foreigners.
c. debit and credit items on current account transactions.
d. debit and credit items on capital account transactions.
B
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In the national income accounts, government expenditure on goods and services exclude
A) transfer payments. B) state and local government purchases. C) local government purchases but include state government purchases. D) spending on national defense.
Which of the following is not a benefit to lenders/investors of financial intermediation?
a. Lower transaction costs than the direct market. b. Lower risks than the direct market. c. More diversification than the direct market. d. More convenient than the direct market. e. Higher yield than the direct market.