A. Define the term "globalization."
b. Describe the benefits of globalization.
c. Who is likely to oppose globalization and why?
What will be an ideal response?
a. Globalization refers to the process of countries becoming more open to foreign trade and investment.
b. The benefits of globalization include: (1 ) consumers have access to a wider array of goods and services at lower prices than under autarky; (2 ) trade permits a far more efficient allocation of resources than is possible under autarky; (3 ) specialization in production leads to productivity gains which raise a nation's standard of living.
c. Opposition to globalization comes from three sources: (1 ) firms and workers harmed by globalization. The revenues and profits of domestic firms that produce the same goods and services that are imported will fall and some workers may lose their jobs; (2 ) those who fear that low-income countries are at risk of losing their cultural identity as multinational corporations sell western goods in the markets of these countries; (3 ) those who are concerned that multinational corporations will relocate factories in low-income countries to take advantage of low-cost labor while disregarding the interests of these countries (e.g., noncompliance with environmental standards) and its citizens (e.g. hiring child labor).
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An example of Friedman's k-percent rule is
A) "do not change the growth rate of the quantity of money." B) "every time GDP decreases, decrease the growth rate of the quantity of money." C) "set the growth rate of the quantity money equal to the unemployment rate." D) "every time GDP decreases, increase the growth rate of the quantity of money." E) "use all information available to determine the growth rate of the quantity of money each time GDP changes."
A government redistribution of income program is proposed with the aim of making the income distribution the same as the 45° line in a Lorenz curve diagram. What implications does the idea of the "big tradeoff" have for the program?
What will be an ideal response?
Banks historically have used the discount window:
A. sparingly, because it is often seen as a sign of financial trouble for a bank. B. often, because it provides instant access to needed funds for banks. C. often, because its low interest rate can serve as a source of profit for banks. D. only during times of economic boom, when there is a high demand for loans.
Which of the following is a positive economic statement?
a. Government control of rent is a fair way to help poor people afford housing. b. Government control of rent keeps landlords from charging too much rent. c. Government control of rent decreases the number of new apartments constructed. d. Government control of rent is an injustice.