“The international flow of goods helps compensate for the international immobility of resources.” Analyze and explain.
What will be an ideal response?
If resources were as mobile as goods, they would flow across borders until cost conditions were equalized throughout the world and there would be no need for specialization and trade. However, it is clear that this is impossible. Even human resources are somewhat immobile and natural resources are not equally endowed in each nation. Therefore, cost conditions differ from nation to nation, and some nations can produce some things relatively more cheaply than others. This leads to specialization and exchange according to the principle of comparative advantage. It is the goods that are bought and sold across borders rather than the resources, and this enables countries to be compensated for the differences in the cost of production.
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How are goods and services produced in the global economy?
A. Developing countries use less human capital but just as much physical capital as advanced economies. B. Emerging economies use more capital-intensive technology than do developing economies. C. Human capital in all economies is similar. D. Advanced economies use less capital than developing economies.
The other checkable deposits component of the M1 measure reported by the Federal Reserve includes
A) negotiable time deposits. B) money market mutual fund shares. C) automatic transfer from savings accounts. D) money market deposit accounts.
An unexpected drop in the LEI should send bond prices __________ and stock prices __________
A) up; up B) up; down C) down; up D) down; down
The Homestead Act was passed in 1862 . However, only about 20 percent of newly-added farm land between 1870 and 1900 belonged to homesteads because
a. Americans were more interested in moving to cities than to homesteads. b. the available land was best suited for grazing livestock, but 160-acre plots were too small to do so profitably. c. a treaty between the U.S. government and Native Americans prevented homesteaders from acquiring most of the land. d. homestead filing fees were gradually increased during this time period.