A nation has an unfavorable balance of trade when
a. it has a surplus in its balance of payments
b. it has a deficit in its balance of payments
c. the value of its imports of goods is greater than the value of its exports of goods
d. its current account is in surplus and its capital account is in deficit
e. it has high tariffs
QUESTION 2If a firm can borrow or lend at a 10 percent annual interest rate, it will
a. buy all units of capital with a marginal rate of return above 10 percent
b. buy all units of capital with an average rate of return above 10 percent
c. buy all units of capital with a marginal rate of return below 10 percent
d. buy all units of capital with an average rate of return below 10 percent
e. select only the unit of capital with the highest marginal rate of return, assuming it is above 10 percent
QUESTION 3In the United States, imports have exceeded exports in every year since 1960.
a. True
b. False
QUESTION 4All types of capital
a. are forms of resources that can be used in future production
b. require a physical existence
c. earn an economic rent
d. yield profits for their owners
e. require obtaining more education and job skills
QUESTION 5In the United States, imports have exceeded exports in every year since 1979.
a. True
b. False
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