If there is a major problem in a country that leads to the rapid withdrawal of foreign investment, this is known as
A. international financial crisis.
B. moral hazard.
C. adverse selection crisis.
D. an international leakage.
Answer: A
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The growth over time in the spread between price and marginal cost of an exhaustible resource is equal to
A) zero. B) one. C) the interest rate. D) the present value of the reserves.
Which of the following can always be used to determine the outcome when there are multiple Nash equilibria?
A) the Pareto Criterion B) cheap talk C) Both A and B D) None of the above.
By making involuntary exchanges illegal,
a. criminal law eliminates such exchanges b. tort law contributes to economic efficiency c. criminal law channels energies into activities that benefit everyone d. criminal law reduces producer surplus while increasing consumer surplus e. antitrust law contributes to monopolization of markets
Suppose that the DeBeers company faces very little competition from other firms in the wholesale diamond market. Why isn't the price of wholesale diamonds $10,000 per carat?
a. because the government would not allow such a high price b. because stockholders would not allow such a high price c. because the company would sell so few diamonds that it would earn higher profits by selling at a lower price d. All of the above are correct.