Which of the following would be an example of direct foreign investment in DVCs?
A. A grant from the World Bank to build an irrigation project in Kenya
B. The financing of a new chemical plant in Peru by a German company
C. A low-interest loan from the U.S. government to Turkey to purchase military hardware
D. A loan from the Japanese government to the Indonesian government to pay for electronic equipment
B. The financing of a new chemical plant in Peru by a German company
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In the ________, the perfectly competitive firm will react to losses by __________________________.
a. short run; reducing production or shutting down b. long run; reducing production or shutting down c. short run; increasing physical inputs d. long run; increasing capital inputs
Economists who identify a goal and then design a mechanism to achieve that goal are engaging in:
A. choice architecture. B. laissez-faire policies. C. setting money prices. D. mechanism design.
Related to the Economics in Practice on p. 716: By 2001, the majority of the fishing fleet in the Indian state of Kerala had mobile phones. As a result of the introduction of mobile phone service, ________ in this fishing industry was virtually eliminated.
A. profit B. competition C. human capital D. waste
The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A