Describe some of the key controversies regarding global cotton trade between high cost and low cost cotton producers
What will be an ideal response?
Low cost cotton producers produce less cotton in total, but rely more on cotton exports for income. Their low incomes put them on the edge of survival and the fact that they make less in total to export makes cotton export revenues critical. High cost cotton producers depend much less on their cotton exports and have much higher incomes. High cost cotton producers are assisted through direct and indirect payments from their governments, tariffs on cotton imports, farm support programs including subsidized loans, insurance, marketing and promotion assistance, and revenue guarantees. These programs keep cotton production where it is less efficient and have the potential to harm living standards in developing nations and keep them from fully exploiting their comparative advantage in cotton.
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
Shirley has to choose between a two-day trip and a three-day trip to Hollywood. The table below shows the expected benefit and cost for the different days
Using optimization in levels and optimization in differences, determine what Shirley's optimum decision should be. Does the decision differ with the techniques used? Which technique is faster to implement? Day Cost Benefit 1 $750 $800 2 $900 $1,000 3 $600 $800
When the Federal Reserve lends reserves to depository institutions, it charges them interest. That interest rate is called the
A) federal funds rate. B) loan rate. C) prime rate. D) discount rate.
A common way used to align the interests of managers with the interests of equity holders is
A) piecework pay. B) stock options. C) forwarded loaded pay schemes. D) insurance.