Explain why international capital markets have expanded since the 1980s
What will be an ideal response?
Many governments have removed restrictions on foreign investments in financial markets since the 1980s, advances in communications and computer technology have made financial exchanges simpler and allowed investors access to information for making investment decisions, and worldwide economic growth has increased the level of saving available for investment.
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Based on Table 9.1, the balance on the financial account is
A) +100. B) +200. C) 0. D) -100. E) -200.
A monopolistically competitive market could be considered inefficient because
a. marginal revenue exceeds average revenue. b. price exceeds marginal cost. c. the efficient scale of production is only achieved in the long run, not in the short run. d. markup pricing does not occur in any other market structure.
The Coase theorem implies that the initial allocation of property rights:
A. determines all aspects of the final outcome of the negotiated agreement. B. does not determine which person will be entitled to engage in the externality generating activity, but does determine which person will receive compensation. C. must be assigned to the person with the greatest costs. D. determines which person will be entitled to engage in the externality generating activity, but does not affect which person will receive compensation.
In the case of a small country, producer surplus
A) increases more with a tariff than with an equivalent quota. B) increases more with a quota than with an equivalent tariff. C) is not changed by tariffs or quotas. D) increases the same amount with tariffs and equivalent quotas.