Suppose a U

question 98

Multiple Choice

Suppose a U.S. resident buys a car from a car maker in Japan. This transaction will:

• A) have a negative effect on Japan's balance of trade in merchandise.
• B) have a negative effect on the U.S. balance of trade in merchandise.
• C) have a positive effect on the U.S. balance of trade in merchandise.
• D) bring money into the United States.
• E) have no effect on Japan's balance of trade in merchandise.

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Definitions:

Joint Probability

The chance that two or more incidents will happen concurrently.

Variances

Measures of the dispersion of a set of data points around their mean value, indicating how spread out the data points are.

E(XY)

The anticipated outcome of multiplying two stochastic variables together, showing how their variances are interconnected.

COV(X,Y)

A measure of the degree to which two variables X and Y move together, indicating the strength and direction of their linear relationship.