1.Which of the following transactions would be included as a credit on Japan's current account?

a. American citizens purchase Japanese-made automobiles

b. Japanese land is sold to Australian citizens

c. European citizens earn interest on Japanese government bonds

d. The Japanese government purchases American Treasury securities

e. A Japanese firm builds a factory in the U.S.

2.Increased American imports of Japanese goods creates

a. an increase in demand for U.S. dollars and a decrease in demand for Japanese yen

b. a decrease in demand for U.S. dollars and an increase in supply of Japanese yen

c. an increase in demand for Japanese yen and a decrease in supply of U.S. dollars

d. an increase in demand for Japanese yen and an increase in supply of U.S. dollars

e. an increase in supply of Japanese yen and an increase in supply of U.S. dollars.

3.The fundamental problem in economics is that resources are limited; yet needs, wants, and desires are unlimited. This is summed up by the concept of

a. money

b. power

c. greed

d. scarcity

e. investment.

4.Which of the following combinations of monetary and fiscal policy would cause the greatest decrease in aggregate demand?

a. Discount rate decreases, gov spending increases, and open market operations: buy bonds

b. Discount rate decreases, gov spending decreases, and open market operations: buy bonds

c. Discount rate increases, gov spending decreases, and open market operations: sell bonds

d. Discount rate decreases, gov spending increases, and open market operations: sell bonds

e. Discount rate increases, gov spending decreases, and open market operations: buy bonds