20A trade balance where exports exceed imports is called tra

20A trade balance where exports exceed imports is called:

trade surplus.

trade deficit.

budget deficit.

none of the above.

21Capital flows deal with:

buying and selling of newly produced final goods and services among countries.

buying and selling of existing real and financial assets among countries.

buying and selling of only domestic final goods and services.

none of the above.

22Potential GDP is:

minimum amount of output that can be produced given the labor force, capital stock, and technology.

maximum amount of output that can be produced given the labor force, capital stock, and technology.

varies over the business cycle.

none of the above.

23Short-run macroeconomic policies concentrate on:

minimizing fluctuations around potential GDP.

maximizing fluctuations around potential GDP.

incentives for increasing productivity and the potential output of the economy.

none of the above.

Solution

20. Correct answer: A
Explanation: trade surplus occurs when the value of a country\'s exports exceeds that of its imports

21. Correct answer: A

Explanation: Capital flows are made up of all of the money moving between countries as a consequence of investment flows into and out of countries around the world.

22. Correct answer: B

Explanation: Potential GNP is the theoretical level of real national output that would be produced if existing labor and capital were fully employed using the best available technology.

23. Correct answer : A

Explanation: When real GDP is less than potential GDP, a number of resources are underused, hence focus of short run policies are to minimize these gdp fluctuations.