One important difference between the international economy of today and the economy of 100 years ago is
A) that labor is so much more mobile.
B) for the first time, technological innovations have reduced the barrier of distance.
C) for the first time, capital is mobile.
D) that price differences in different markets have narrowed.
E) the presence of international bodies such as the IMF and World Bank.
E
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How are the marginal revenue product (MRP) curve and the demand curve for capital related?
a. MRP slopes downward, forcing demand to rise. b. The MRP and demand curves are the same. c. MRP slopes downward, pushing demand toward equilibrium. d. MRP crosses the demand curve at its lowest point.
Assume there are only two countries in the world, Pacifica and Atlantica. Both countries produce and consume surfboards. The pre-trade price of surfboards in Atlantica is lower than the pre-trade price of surfboards in Pacifica. Draw a three-graph diagram to depict the Pacifica, Atlantica, and international markets for surfboards illustrating the pre-trade price difference. Now assume that free trade opens up between Pacifica and Atlantica. Depict a plausible world price in the graphs. Using one of the three graphs below, show what happens to overall economic welfare in the two countries. Be sure to label and refer to the graphs in your answer.
What will be an ideal response?
Which of the following is true?
A. Keynes asked the question: If supply creates its own demand, why are we in a worldwide depression? B. According to Keynes, if savings were greater than investment, interest rates would fall, bringing the economy back to full employment. C. Keynes believed that wages and prices were flexible. D. Keynes believed the economy was basically stable.
Which of the following statements is true about causes of business cycle fluctuations?
A. Economists all agree that supply shocks are the cause of most business cycle fluctuations. B. Economists all agree that productivity shocks are the cause of most business cycle changes. C. Economists all agree that monetary changes are primarily responsible for business cycle fluctuations. D. There are a wide range of theories as to the underlying causes of business cycle movements.