What is the major anticipated benefit of global capital markets? Do all countries gain?
What will be an ideal response?
Responses to the benefit should center on efficient allocation of capital, with countries that have promising opportunities receiving their share. Countries that have few opportunities would expect to be starved of capital.
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Which of the following statements is not correct?
a. Some firms pay wages that are above the equilibrium wage. b. Workers sometimes form labor unions to push their wages up. c. Wages never deviate from the balance of supply and demand in the market for labor. d. The federal government mandates that employers pay their workers at least as much as the minimum wage.
High protective tariffs
A. would be supported by most economists. B. will become more likely if we do not reduce our trade deficit. C. have very little support. D. would definitely solve all our trade problems.
The goal of multilateral trade agreements is usually to
a. reduce tariffs in various nations simultaneously to blunt political pressure for protectionism. b. ensure that tariffs are used only to promote infant industries that will eventually become viable. c. use targeted tariffs to ensure that nations produce those goods in which they have a comparative advantage. d. equalize the level of tariffs across nations so no nation is disadvantaged relative to others.
An example of acquired comparative advantage is that
A. some U.S. consumers prefer German cars over American cars because German cars have a reputation for being very safe. B. the U.S. government provides a subsidy to firms that are trying to increase their exports to other countries. C. China specializes in the production of labor-intensive goods because of the amount of labor available in the country relative to capital. D. the United States imports coffee beans because coffee beans cannot be grown in the United States.