How much trade do currency unions create?
What will be an ideal response?
The main result is that currency unions promote trade. One study found that on average, two countries that are members of the same currency union trade three times as much with each other as countries that do not share a currency. Even if the euro were to raise trade within the euro zone by 50 percent, the positive effect on people's welfare could be immense, as another study has shown. However, some challenge the conclusion. Some claim the results would not be duplicated when applied to large countries such as the members of the EU; another study found out that leaving a common currency area as Ireland did has not caused reduction in UK-Ireland trade.
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The question of "What goods and services get produced?" most closely relates to which of the following issues?
A) obtaining specialized training to increase one's income B) building a missile defense system, or putting a computer in every elementary school classroom C) taxing high income workers to give payments to poor households D) the distribution of goods and services in the economy E) producing goods and services in the least costly manner
Suppose Szmul Hecht's farm A is 10 miles from the marketplace, while Frantisek Bass's farm is twice as far away. Ceteris paribus, We know then that the
a. present value of Hecht's farm is lower than the present value of Bass's farm b. differential rent Hecht receives is greater than the differential rent Bass receives c. differential rent Hecht receives is less than the differential rent Bass receives d. location rent Hecht receives is less than the location rent Bass receives e. present value of Hecht's farm is higher than the present value of Bass's farm
Government intervention may be appropriate to correct market outcomes because of
A. Externalities. B. Production possibilities. C. Private goods. D. None of the choices are correct.
A fractional reserve system means a commercial bank can lend out most of its deposits
a. true b. false