In equilibrium, all traded goods sell at the same price internationally because of
a) government intervention
B) arbitrage
C) the fact that the underlying value is the same everywhere
D) none of the above
Ans: B) arbitrage
You might also like to view...
In a graph showing the market supply and demand for British pounds in terms of U.S. dollars, the demand-for-pounds curve is downward-sloping because ________.
A. fewer British pounds can be purchased if pounds become less expensive B. more British pounds can be purchased if pounds become less expensive C. fewer U.S. dollars can be purchased if British pounds become less expensive D. more U.S. dollars can be purchased if British pounds become more expensive
In a recent court case, an expert witness defined a monopoly as a firm that can "raise price without reducing its total revenue"
What does this imply about the elasticity of demand? Would this definition hold for a profit-maximizing monopoly? Explain.
Answer the following questions true (T) or false (F)
1. Free trade refers to trade between countries without government restrictions. 2. A quota is the same as a voluntary export restraint. 3. A quota is a numerical limit on the quantity of a good that can be imported.
Households receive bonds when they
A. purchase a share of ownership in firms. B. sell shares of a firm's stock. C. borrow money from financial institutions. D. lend money directly to firms.