Biology Forums - Study Force

The Mexican peso crisis of 1994 and 1995 was directly related to
 
  A) the start of NAFTA.
  B) a large capital account surplus.
  C) a large capital account deficit.
  D) an undervalued peso.
  E) a large current account surplus.

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Question 2 - Critique the infant industry or the labor argument for protection.
 
  What will be an ideal response?

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Question 3 - Mercantilists perceived trade as a zero sum game.
 
  Indicate whether the statement is true or false

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Question 4 - Indifference curves intersect at the point of utility maximization.
 
  Indicate whether the statement is true or false

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Question 5 - We can expect deviations from PPP because of
 
  A) quotas and tariffs.
  B) transportation costs.
  C) differentiated goods.
  D) All of the above.

[ 1 ]  B

[ 2 ]  Critique of the labor argument largely rests on the confusion between nominal wage rate differences and productivity wages.
Critique of the infant industry argument is based on 1 ) the rent seeking and misapplication of what it means to be an infant industry, 2 ) the government's ability to correctly identify such industries vs. the market's ability to do so, 3 ) the protection creates disincentives for efficiency and low-cost production.

[ 3 ]  TRUE

[ 4 ]  FALSE

[ 5 ]  D

Great answer!