The main focus of economic studies concerns:
A.) The behavior of successful businesses.
B.) The role of money in our economy.
C.) How best to allocate scarce resources.
D.) The elimination of opportunity costs.
C.) How best to allocate scarce resources.
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Many economists criticize protectionism because it causes losses to consumers and eliminates jobs in domestic industries that use protected products. Why, then, do some people support protectionism?
A) Supporters of protectionism in high-income countries believe that wages will fall as a result of competition with firms from developing countries. B) Supporters of protectionism believe that free trade will lead to inflation. C) The criticisms of economists are based on theory. In fact, protectionism increases consumer and producer surplus as well as employment. D) Supporters of protectionism believe free trade will cause their countries to lose their comparative advantage.
When a foreign investor buys a bond issued in the United States
A) the balance on the capital account increases. B) the balance on the current account increases. C) the balance of trade increases. D) the balance on the financial account increases.
Mark complains: "I can't believe they raised the price of comic books, and because of this, I'm going to reduce my demand for comic books." Is Mark stating the concept of demand correctly?
A country that frequently uses capital controls:
A. will attract more investment. B. decreases the risk for foreign investors. C. increases the risk for foreign investors. D. should see lower interest rates on its domestic bonds and lower prices.