The adverse selection problem in international investment means
A) that those seeking funds for the riskiest projects are those most actively seeking the funds.
B) that the recipients of the funds may use the funds for other than the approved projects.
C) that government officials may demand higher than the usual amount of bribes.
D) those in the highest levels of government are the most dishonest.
A
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The table contains data for a hypothetical single-product economy. Nominal GDP in year 3 is
A. $100. B. $225. C. $450. D. $150.
A closed economy refers to an economy in which:
A. a country exports, but does not allow imports. B. all goods are produced and sold domestically. C. intermediate goods are sold domestically. D. all goods are consumed domestically.
In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.
Which of the following is a TRUE statement?
A. Consumers benefit from trade and producers do not. B. Everyone benefits from free trade. C. Exporters benefit from trade and importers do not. D. Free trade harms domestic producers of goods that face import competition.