Municipal bonds are issued by:
A. the U.S. Treasury, but the proceeds can only be used by cities.
B. cities only.
C. states and cities, but their interest is taxable only at the federal level.
D. states and cities and their interest is exempt from U.S. government taxation.
Answer: D
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Under some circumstances, trade could stifle the development of new industries and reduce global efficiency. All of the following describe conditions that could lead to that situation EXCEPT
A) an initial head start gives a scale advantage to already existing firms in one country. B) diseconomies of scale make it impossible for new firms to enter the market. C) a location has a better-developed linkage between suppliers and producers, giving it a cost advantage. D) a historical accident, such as the shifting of airplane production to the United States to avoid World War II bombings, causes firms in one location to have a competitive advantage.
Use the following diagram to answer the next question.
In the diagram, solid arrows reflect real flows and broken arrows are monetary flows. Flow (5) might represent
A. the purchase of laptop computers by the state of Iowa. B. transfer payments to unemployed workers. C. personal income tax revenues. D. the provision of public schools by local governments.