The concept of an open economy means that
A) a nation's borders are open to flows of imports and exports.
B) exports should be controlled but imports should be allowed in without restriction.
C) imports and exports should be restricted.
D) imports should be limited while exports should be expanded.
A
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Which of the following leads to a lower rate of capacity utilization in a firm, assuming all else equal?
A) An increase in the number of workers in the firm B) An increase in the demand for the firm's product C) A decrease in the number of workers in the firm D) A decrease in the price of the firm's product
Is the call for protection on the basis of "infant industry" valid?
a. No, because protection has no place in industrial development. b. No, protection is always improper. c. Uncertain, economic theory has no answer to this question. d. Yes, although it can be overstated and abused.
Suppose that Gigantic Company is increasing in size. As Gigantic Company grows, demand for inputs causes input prices to rise. It is likely that continued growth will result in:
A. economies of scale. B. reduced fixed costs. C. diseconomies of scale. D. increasing marginal returns.
Compensation of losers from opening an economy to international trade is not common because:
A) losers don't lose so much that they would require to be compensated. B) the loss is made up through the availability of a wider array of goods and services. C) it is difficult for governments to carry out such compensation policies. D) the government will have to transfer huge amounts of money to compensate losers.