Suppose that an American company opens and operates a restaurant in Ireland. This is an example of
a. foreign direct investment. American saving is used to finance Irish investment.
b. foreign direct investment. American saving is used to finance American investment.
c. foreign portfolio investment. American saving is used to finance Irish investment.
d. foreign portfolio investment. American saving is used to finance American investment.
a
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In the above figure, CBL is the cost of breaking the law. If it is illegal to sell, but not illegal to buy, then the price per unit will be
A) $500. B) $400. C) $300. D) $200.
If a firm's product becomes a commodity
A) the firm gains market power. B) the firm's strategy has apparently paid off. C) the firm has become a monopoly. D) the firm looses market power.
If the Fed decreases the nominal interest rate by 2 percent, how will the real interest rate change in the short run?
a. It will decrease by 1 percent. b. It will decrease by 2 percent. c. It will increase by 1 percent. d. It will increase by 2 percent.
Regulation is guaranteed to be more efficient than a monopoly
A) True, the government is able to internalize the dead weight loss of the monopoly. B) True, the consumers are better off if government provides the product rather than a private firm. C) False, the government does not always have sufficient information to provide a more efficient market outcome. D) False, the consumers are worse off under government regulation.