What is known as the Dutch disease?
a. The problem that arises when a government cannot meet its foreign debts
b. The phenomenon of a boom in one industry causing declines in the rest of the economy
c. A sudden and unexpected devaluation of a currency as a consequence of policy controls
d. The problem that arises when high imports force an economy to borrow from external sources
e. A deficit in the balance of payments of the economy that arises due to a sudden appreciation of the domestic currency.
b
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If the U.S. can produce pizza for $5 each and barrels of beer for $25 each, and Germany can produce pizza for $7 each and barrels of beer for $21 each, then
A) each country will produce both pizza and beer. B) the U.S. will produce beer and trade with Germany for pizza. C) the U.S. will produce pizza and trade with Germany for beer. D) All of the above.
A monopoly can block the entry of others
Indicate whether the statement is true or false
Explain carefully, with a diagram, the conditions for immiserizing growth to occur. In particular, discuss the effect of the size of the country, the volume of foreign trade, the type of growth the country experiences, and foreign demand for the exports of the country.
What will be an ideal response?
Which of the following expressions represents the amount of foreign currency you can obtain with one U.S. dollar?
A) Et B) Eet+1 C) 1/ Eet+1 D) ?t E) none of the above