Requiring a firm with international operations to follow the standards of its home country instead of those of the foreign country has all of the following advantages EXCEPT
A) it takes care of the fear of a race-to-the-bottom by making it impossible for a home-based company to exploit low standards.
B) it shifts the costs of improved standards to firms and consumers in high-income countries.
C) it removes the threat of domestic firms relocating abroad for low standards and ensures that any relocation that takes place is due to foreign comparative advantage.
D) it avoids the problems of high-income countries dictating what standards are to be used. In this situation, firms that cross national boundaries must conform to whichever standards are higher.
E) it is a comprehensive measure, since it addresses the problem of production in foreign firms as well as firms from high-standards countries that relocate abroad.
E
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The situation in which actual output exceeds potential output
a. is impossible because all resources are employed to produce potential output b. is possible only in times of high unemployment c. is possible only if the unemployment rate is negative d. is possible only in the long run e. creates pressure for inflation
One way the government decides how to pay for a public good is:
A. the transfer of surplus. B. the ease of collecting payout. C. if they can make the good excludable and charge its users. D. All of these are ways the government allocates payment of public goods.
Which of the following could not be expected to shift the aggregate demand curve?
A. net exports fall B. consumption spending decreases C. an increase in government spending D. a change in real GDP
Which of the following is incorrect?
A. The nominal interest rate is the rate of interest expressed in terms of current dollars. B. The real interest rate is the rate of interest expressed in terms of dollars of constant or inflation-adjusted value. C. The nominal interest rate is the real interest rate less the rate of inflation. D. During periods of inflation, the nominal interest rate will exceed the real interest rate.