Which of the following is FALSE?
A) Current account deficits must be financed through inflows of capital.
B) Loans from abroad add to a country's stock of external debt and generate debt service.
C) Borrowed funds are always used in a manner that contributes to the expansion of the country's productive capability.
D) Debt service can become an unsustainable burden that holds back development.
C
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A monopolistically competitive firm is producing at a short-run output level where average total cost is $10.00, marginal cost is $5.00, marginal revenue is $6.00, and price is $12.00. In the short run, the firm should
A. increase product price. B. make no change in the level of output. C. increase the level of output. D. decrease the level of output.
Which of the following is NOT an example of physical capital?
A) a computer B) a lawn mower C) a dump truck D) a building E) a bond
The manager of a large luxury hotel chain is currently negotiating a four year contract with a linens supplier. The linens company will supply fresh laundered bedding and towels to the hotel over a four year period; however, the hotel chain can ends its contract with the linens company at the end of the first, second, or third years if the linens company does not supply quality linens. What can
the manager of the hotel chain do to avoid the end-game problem? A) Pay the linens company in full after the third year. B) Pay the linens company in full after the second year. C) Pay the linens company in full after the first year. D) Offer a bonus to the linens company if they provide quality linens all four years.
Bid-rigging is more likely when
a. auctions are for larger amounts b. auctions are infrequent c. auctions are for smaller amounts d. the auctioneer is paid on commission rather than a fixed fee