The Balance of Payments Has Become a Central Issue for the United

question 27

Multiple Choice

The balance of payments has become a central issue for the United States because

• A) when the balance of payments is not balanced, society is unbalanced.
• B) the U.S. economy cannot grow when the balance of payments is in deficit.
• C) the U.S. has run huge trade deficits in every year since 1982.
• D) the U.S. never experienced a surplus in its balance of payments.
• E) the U.S. once ran a large trade surplus of about $40 billion.

Understand the concept of producer surplus and how it is affected by market changes.

Calculate changes in consumer surplus due to shifts in price.

Identify the effects of market equilibrium changes on consumer and producer surplus.

Understand and analyze the relationship between supply, demand, and total surplus.

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Definitions:

Principal-agent Relationships

A framework within economics that describes the dynamics when one entity (the principal) hires another (the agent) to perform a task on their behalf, often involving delegation of decision-making authority.

Observability

The degree to which the internal states of a system are accessible to its external observation, often used in context of controlling complex systems.

Ideal Organization

A theoretical or model entity that operates with maximum efficiency, effectiveness, and ethics in achieving its goals.

Decision Makers

Individuals or groups responsible for making choices that affect the outcomes of various strategies and operations within organizations.