How has the globalization of financial markets affected the way in which countries conduct their economic policies?
What will be an ideal response?
The globalization of financial markets imparts discipline to national economic policies. In a segmented market, governments may follow bad economic policies and get away with it; since domestic residents are not allowed to invest abroad, a poor domestic economic policy is not punished by corresponding outflows of money. Opening up domestic markets to global competition allows the domestic economy to compete on international markets and will allow money to flow where investment opportunities are best.
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The above figure shows the supply and demand curves for high-skilled and low-skilled labor. Low-skilled workers earn a wage rate of
A) $15 per hour. B) $12 per hour. C) $9 per hour. D) $6 per hour.
Exchange rates (for instance, the dollar price of yen) tend to be different worldwide at any point in time because of different tastes for currencies in each country
Indicate whether the statement is true or false
Suppose a firm has the following total cost function: TC = 100 + 4q2. What is the minimum price necessary for the firm to earn profit? Below what price will the firm shut down in the short run?
What will be an ideal response?
Unexpected high inflation redistributes wealth from:
A. those who save to those who borrow. B. those who borrow to those who save. C. those who borrow to banks. D. banks to those who save.