The manager of View Your World, a high-end window manufacturer, notices that the cost to purchase glass for their windows in the spot market has fallen. As a result of the change, which of the following is true?
A) The manager has less of an incentive to integrate backward.
B) The manager has less of an incentive to integrate forward.
C) The manager has more of an incentive to integrate forward.
D) The manager has more of an incentive to integrate backward.
A) The manager has less of an incentive to integrate backward.
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When equilibrium is present in the foreign exchange market, which of the following will tend to be in balance?
a. the value of goods exported and the value of goods imported b. real and nominal interest rates c. imports plus capital outflow and exports plus capital inflow d. tax revenues and government expenditures
Which of the following is NOT an example of an externality?
A. The development of a vaccine for preventing flu. B. Acid rain that destroys forest land throughout the Midwest. C. Gas prices that doubled between 1998 and 1999. D. A factory that dumps dangerous chemicals into the Hudson River.
Regulatory policies requiring lenders to extend more low down-payment loans to higher-risk borrowers along with the Fed's low short-term interest rate policy during 2002-2004 caused
A) housing prices to fall during that period. B) mal-investment, that is, excessive investment in housing construction during 2002-2005. C) a subsequent increase in interest rates that led to a housing boom. D) a reduction in housing construction during 2002-2005.
If the market mechanism causes the economy to arrive at the wrong mix of output, there is:
A.) Market failure. B.) Mixed economy failure. C.) Government failure. D.) Laissez faire.