Under the Simplifying Assumptions Made in the Text, a Current

question 14

Multiple Choice

Under the simplifying assumptions made in the text, a current account deficit

• A) arises when imports exceed exports.
• B) arises when the purchase of foreign assets by a nation's citizens exceed the purchase of domestic assets by a nation's citizens.
• C) is necessary for a long run economic growth.
• D) arises when a country's exchange rate falls.

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Definitions:

Marginal Resource Cost

Marginal Resource Cost is the additional cost incurred by obtaining one more unit of a resource, such as labor or raw materials, used in the production of goods and services.

Profits

The financial gain realized when the revenues from business activities exceed the expenses, costs, and taxes needed to sustain the activity.

MRP Curve

Short for Marginal Revenue Product curve, which represents the additional revenue a firm earns by employing one more unit of input, assuming other factors remain constant.

Imperfectly Competitive

Describes markets where the conditions necessary for perfect competition are not met, due to factors like monopolies, oligopolies, or monopolistic competition.