Define international trade and international financial transactions. Give an example of each one.
What will be an ideal response?
International trade refers to either purchasing or selling currently produced goods or services across international borders. An example of international trade is the purchase of Italian tile by a U.S. tile distributor. International financial transactions refer to the transfer of ownership for real or financial assets between the citizens of different countries. An example of an international asset transaction is the purchase of a U.S. stock by a Japanese citizen.
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The invisible hand is mostly guided by:
A) costs of production. B) quantity of goods and services sold. C) market prices. D) government intervention.
What are the assumptions of the Heckscher-Ohlin theorem?
What will be an ideal response?
The opportunity cost of an action is
a. the monetary payment the action required. b. the total time spent by all parties in carrying out the action. c. the value of the best opportunity that must be sacrificed in order to take the action. d. the cost of all alternative actions that could have been taken, added together.
When the wage rate rises, the substitution effect leads a worker to
a. increase consumption while the income effect leads to a decrease in consumption. b. decrease consumption while the income effect leads to an increase in consumption. c. increase consumption, as does the income effect. d. substitute sleep for other leisure.