The record of a country's transactions in goods, services, and assets with the rest of the world is its balance of trade.
Answer the following statement true (T) or false (F)
False
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The De Beers Company blocked competition
A) by controlling the supply of most of the world's high-quality bauxite, the mineral used to produce aluminum. B) in the diamond market by controlling the output of most of the world's diamond mines. C) in the market for fresh and frozen cranberries because it controls about 80 percent of the cranberry crop. D) because it has lower production costs than other department stores due to economies of scale.
Explain why a risk averse individual will purchase full insure if a policy is actuarially fair, but only partially insure or not insure at all, if it is not. Use graphs to support your answer.
What will be an ideal response?
Why is monetary policy more effective in an open economy than in a closed economy?
A. Trade deficits affect exchange rates, which can offset adverse interest rate effects. B. Borrowers can choose to use foreign capital, so that interest rate effects are stronger than expected. C. Interest rate changes affect exchange rates, so that capital flows reinforce the effect of monetary policy. D. Banks can choose to lend to foreigners, so that interest rate effects are essentially nullified.
The gains from specialization and trade are based on comparative advantage.
Indicate whether the statement is true or false.