Because of the problems of adverse selection and moral hazard, it has been suggested that the World Bank and International Monetary Fund
A) make loans to the riskiest nations so that private investors will not be tempted to take a risk.
B) impose tougher preconditions on borrowers.
C) not make loans to risky nations because there is a high demand for funds from safer nations.
D) loan only to countries that have free elections.
B
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Refer to the table below. Based on their comparative advantage, Martha should specialize in ________ while Julia should specialize in ________. Time to Make a PieTime to Make a CakeMartha60 minutes80 minutesJulia50 minutes60 minutes
A. cakes; pies B. neither pies nor cakes; both pies and cakes C. pies; cakes D. both pies and cakes; neither pies nor cakes
Suppose the United States exports cars to France and imports cheese from Switzerland. This situation suggests that
a. the United States has a comparative advantage relative to Switzerland in producing cheese, and France has a comparative advantage relative to the United States in producing cars. b. the United States has a comparative advantage relative to France in producing cars, and Switzerland has a comparative advantage relative to the United States in producing cheese. c. the United States has an absolute advantage relative to Switzerland in producing cheese, and France has an absolute advantage relative to the United States in producing cars. d. the United States has an absolute advantage relative to France in producing cars, and Switzerland has an absolute advantage relative to the United States in producing cheese.
Which is the most accurate statement?
A. The Japanese and Chinese bear most of the blame for our huge trade deficit. B. Our trade deficit with China has been rising more rapidly than our trade deficit with Japan. C. Our combined trade deficits with Japan and China now total about $100 billion. D. Most economists agree that the best way to reduce our trade deficit would be to impose high tariffs on our imports from Japan and China.
Recall the Application about the wireless phone service provided by thousands of entrepreneurial women in Pakistan to answer the following question(s).Recall the Application. Because the average earnings of the "wireless women" in Pakistan are three times the average wage rate, then we would expect that in the long run:
A. more entrepreneurs would exit the market. B. more entrepreneurs would enter the market. C. the earnings of wireless women would increase. D. the cost of making a wireless call in Pakistan would increase.