How has the composition of trade flows changed from the early 20th century to today? Compared to the past, is anything about trade today new?
What will be an ideal response?
Prior to World War I, most trade consisted of agricultural commodities and raw materials, while today trade is primarily manufactured consumer goods and capital goods. Given recent advances in telecommunications, services now can be outsourced and service industries face growing international competition.
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Based on the table and information in the previous question, which of the following is TRUE?
A) George prefers to make $15,000 with certainty than make the investment. B) George prefers making the investment than to make $15,000 with certainty. C) George is indifferent between making $15,000 with certainty and making the investment. D) As the investment has risk George should not make it under any circumstances.
The imposition of price ceilings on a market often results in
a. an increase in investment in the industry. b. a persistent surplus in the market. c. the diversion of income toward black-market suppliers. d. lower prices being offered on the black market.
Economists favoring the rational expectations theory maintain that
A. market participants plan counterstrategies to what the Fed is planning to do. B. the Fed has no real short-term effect on output and employment unless it truly surprises markets. C. market participants anticipate government policies. D. All of the choices are correct.
Both firms depicted in Table 9.5 can benefit if Firm A sells its pollution permit allowing it to generate 1,000 gallons of wastewater to Firm B for:
A. a price between $12 and $15. B. a price between $0 and $6. C. a price greater than $20. D. It is not possible for firms to benefit if Firm A sells a permit to Firm B.