Compare and contrast the financial crises in Mexico in 1994 and in Asia in 1997
What will be an ideal response?
In both cases large amounts of foreign investment poured into the countries. The Mexican crisis was precipitated by political events that caused concern among foreign investors and led them to pull funds out. Mexico was forced to devalue the peso, which exacerbated the crisis. In Asia, investors became pessimistic as some of their investments lost money and the withdrawal of funds devalued currencies throughout the region. Thus in both cases the large movements of global capital market funds were part of the story of the crisis.
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When firms in monopolistic competition are making an economic profit, firms will
A) enter the industry, and demand will increase for the original firms. B) exit the industry, and demand will increase for the firms that remain. C) exit the industry, and demand will decrease for the firms that remain. D) enter the industry, and demand will decrease for the original firms.
When Airbnb customers in Malibu start paying hotel taxes, this will have the potential to ________ the equilibrium price in this market and, therefore, ________ efficiency
A) raise; increase B) raise; decrease C) lower; decrease D) lower; increase