Answer the following statements true (T) or false (F)
1. Regulatory capture in government often happens because the people who are most qualified to supervise and regulate an industry oftentimes are or have been the leaders of the industry.
2. Deregulation of an industry will always lead to an improvement in economic efficiency.
3. Loan guarantees provided by government will reduce the willingness of investors to take on the risk in a project.
4. "Informal payments" or "under-the table fees" are a common form of corruption.
5. The U.S. is among the countries that have very low levels of political corruption, as reported in the Global Corruption Barometer of 2010-11.
1. TRUE
2. FALSE
3. FALSE
4. TRUE
5. TRUE
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Joe quits his job as an insurance agent and opens his own sporting goods store. If his profits as measured by his accountant are greater than zero, then
A) he made a good move because he is earning above normal profits. B) his economic profit must be greater than zero. C) his opportunity costs must be zero. D) There is not enough information to determine his economic profit, if any.
The balance of trade can only worsen if income ________ relative to absorption
A) increases B) decreases C) does not change D) None of the above
When foreigners are making more "investments" in a country than the residents of the country are making abroad, which of the following is most likely to occur?
a. Inflation. b. Rapid growth of the money supply. c. A balance of trade deficit. d. A negative net investment rate.
Which of the following features are relevant for determining the extent of a market?
A. Its geographical boundaries B. Technological innovations that would reduce the cost of production C. The range of products to be included in it D. both A and C E. both A and B F. both A and C