Suppose that trade in asset is not allowed but the two countries sign a treaty that guarantee the sending of 25 tons of kiwi in good time by the high output country in that season. What will the outcome of such a treaty? Explain why
What will be an ideal response?
The outcomes will be exactly the same as in Case D above. In other words, rather than signing a treaty, just leaving the financial markets to function will lead us to the desirable results.
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Suppose bad weather decreases the quantity of wheat by 12 percent. If the price elasticity of demand for wheat is 0.6, how would the crop failure affect the price of wheat? Would the crop decrease benefit or harm wheat farmers?
What will be an ideal response?
Savings and investment are equal:
A. at the equilibrium in the market for loanable funds. B. because banks regulate their flow. C. at an interest rate set by the Fed. D. when banks operate according to banking regulations.
Using the aggregate demand and aggregate supply model, an increase in what curve is by itself consistent with the changes in prices and output that occurred during World War II?
Charlotte goes hiking in upper Wisconsin for two weeks. This is an example of ______.
a. nonmarket transactions b. the underground economy c. leisure d. externalities