Starting from a Position Where the Nation's Money Demand Equals

question 21

Multiple Choice

Starting from a position where the nation's money demand equals the money supply and its balance of payments is in equilibrium,economic theory suggests that the nation's balance of payments would move into a surplus position if there occurred in the nation:

• A) A decrease in the money supply
• B) An increase in the money supply
• C) A decrease in the money demand
• D) None of the above

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Definitions:

Return on Total Assets

A financial ratio that measures a company's ability to generate earnings from its total assets.

Bonds

Fixed income investments representing a loan made by an investor to a borrower, typically corporate or governmental, that pays back with interest.

Par Value

The stated value or face amount of a bond, stock share, or coupon as declared by the issuing entity.

Journal Entry

A record in the books of accounts that notes the details of a financial transaction.