The push toward creating more regional trade agreements necessarily harms the multilateral liberalization process that is at the heart of the WTO
What will be an ideal response?
There are some economists, most notably Bhagwati, who would agree with this statement. They oppose regionalism because of the trade diversion it causes and because, they argue, regional agreements distract countries from the multilateral process. Others, including Krugman, argue that regionalism is a natural process, owing to regional cultural similarities and the economics of transportation costs. These agreements do not divert much trade, they contend, because trade tends to be regional anyway and because external barriers are low. Moreover, success in negotiating regional agreements may spur on multilateral talks.
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An increase in the income tax rates:
a. makes the labor supply curve more inelastic. b. increases the opportunity cost of leisure. c. lowers the opportunity cost of leisure. d. shifts the labor supply curve to the right. e. shifts the labor demand curve to the right.
Rigged elections, partly free markets, and authoritarian control, as seen in countries like Russia and China, are all characteristics of what the text calls
a. "extremist theocracy." b. "systematic antiglobalization." c. "failed stateness." d. "illiberal democracy."
What is the? short-run effect of increased deficit spending on an economy experiencing a recessionary? gap?
a. Aggregate demand will increase, creating an inflationary gap. b. Aggregate demand decreases, and the gap widens. c. Aggregate demand increases and the gap closes. d. None of the above
Which economic principle states that when more of a good is consumed, the incremental satisfaction delivered by that good decreases?
a. the law of consumer choice b. the law of consumer equilibrium c. the law of demand d. the law of diminishing marginal utility