If foreign firms send profits back to their industrial countries from the developing countries, developing countries will have a larger deficit on their balance of payments accounts.
a. True
b. False
Indicate whether the statement is true or false
Question 2An example of a positive externality is:
a. freeway congestion.
b. pollution in a resort lake.
c. airport noise.
d. beautiful trees on property along a parkway.
Question 3When the short run aggregate supply curve shifts left, it ___ the short-run Phillips curve.
a. Moves the economy up along
b. Moves the economy down along
c. Shifts right
d. Shifts left
Question 4The total social costs of production are:
a. private costs plus private benefits.
b. private benefits minus private costs.
c. private costs plus external costs.
d. private costs minus external costs.
Question 5Mexico and India have a fairly large number of engineers and technical personnel, which means that new technology can be adapted relatively quickly.
a. True
b. False
Indicate whether the statement is true or false
Question 6When the short run aggregate supply curve shifts right, it ___ the short-run Phillips curve.
a. Moves the economy up along
b. Moves the economy down along
c. Shifts right
d. Shifts left
Question 7In the 1990s, foreign direct investment had become the most important source of funds for developing countries.
a. True
b. False
Indicate whether the statement is true or false
Question 8Private costs are those borne by:
a. the government.
b. the producer of an item.
c. both an item's producer and outside parties affected by a negative externality.
d. outside parties affected by a negative externality.
Question 9The short-run Phillips curve could shift to the left as a result of either ____ or ____.
a. rising oil prices; increasing inflation expectations
b. rising wages; falling prices
c. declining oil prices; falling inflation expectations
d. falling wages; rising prices
Question 10Foreign direct investment includes portfolio investment.
a. True
b. False
Indicate whether the statement is true or false
Question 11Increase in the number of transactors makes it difficult to negotiate private agreements for environmental goods.
a. True
b. False
Indicate whether the statement is true or false
Question 12Which of the following is true?
a. Inflation and unemployment rates can both decrease in the short run in response to negative supply shocks.
b. Inflation and unemployment rates cannot both increase or both decrease in the short run in response to changes in aggregate demand.
c. Inflation and unemployment rates can both increase in the short run in response to positive supply shocks.
d. All of the above are true.
Question 13Statistics show that countries with the lowest rates of economic growth have a strong outward-oriented development strategy.
a. True
b. False
Indicate whether the statement is true or false
Question 14The Coase theorem implies that an efficient solution is possible only if property rights are well-defined and transactions costs are low.
a. True
b. False
Indicate whether the statement is true or false