A case for capital inflow controls can be made because capital inflows
A) can cause a lending boom and lead to excessive risk taking.
B) never finance productive investments.
C) always finance productive investments.
D) are less likely to cause financial crises than regulation of banking activities.
A
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An income effect
A. is measured as the change in prices over time. B. is not possible when people are unemployed. C. requires interest rates to remain constant. D. is the change in the quantity demand due to the fact that real income changes when prices change.
The putting up of outside collateral is
A) one form of the moral hazard problem. B) one form of the adverse selection problem. C) a signal of a high-quality borrower. D) a signal of a low-quality borrower.
If U.S. buyers purchased $500 billion of foreign goods and foreign buyers purchased $400 billion of U.S. goods, the U.S. balance of trade would be:
a. ?$100 billion. b. $100 billion. c. $400 billion. d. none of these.
Which of the following is most likely to result in a decline in the economic growth of a nation?
a. The installation of a network of irrigation ditches and pumping stations to grow fruits and vegetables in parts of southern California b. The invention of a threshing machine for harvesting grains c. Increased government funding for higher-secondary education d. Emigration by the citizens of Nomanzia, an island country, when a politically repressive regime took office