A Company in Panama Pays for a U

question 98

Multiple Choice

A company in Panama pays for a U.S.architect to design a factory building.By itself this transaction

• A)increases U.S.exports and so increases the U.S.trade balance.
• B)increases U.S.exports and so decreases the U.S.trade balance.
• C)increases U.S.imports and so increases the U.S.trade balance.
• D)increases U.S.imports and so decreases the U.S.trade balance.

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Definitions:

Elastic Demand

A market situation where the quantity demanded of a good or service changes significantly as its price changes.

Short Run

A period during which at least one of a firm's inputs is fixed, limiting its ability to adjust production levels.

Long Run

A period of time in economics sufficient for all markets to adjust to changes, including the production capacity of the industry.

Price Paid

The actual amount of money exchanged for acquiring a good or service.