Describe how a sudden stop leads to a financial crisis
What will be an ideal response?
A sudden shit from positive to negative flows from one year to the next in the foreign owned reserve assets in the nation and loans to domestic firms may cause the financial account to become negative. This means there are no inflows to finance a current account deficit, so it must move from a negative balance to a positive balance, usually by a sudden reduction in imports and an eventual increase in exports. This shift in trade relations may cause a deep recession.
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On efficiency grounds, corrective taxes should not be given as compensation to those individuals harmed by negative externalities
a. True b. False
Almost 70 percent of U.S. garbage:
a. is incinerated. b. is recycled. c. goes to landfills. d. is sent on barges to other countries.