Your friend does not understand the benefits of globalization. Outline for your friend the positive economic aspects of globalization
What will be an ideal response?
Globalization is the process of countries becoming more open to foreign trade and investment. The increased investment either by foreign direct investment or foreign portfolio investment can give a low-income country access to funds and technology that it might not otherwise have. These funds can help the country invest in factories, machinery, and the equipment needed for economic growth. The extra capital can raise labor productivity, growth, and GDP per capita. Trade and investment can also provide the country with much needed upgrades in technology. One of the lessons of the economic growth model is that technological change is more important for raising productivity than are increases in capital. It is an important ingredient for rapid economic growth. Technological change is an important contributor to long-term economic growth.
The bottom line is that trade and investment can cause standards of living to rise. Indeed, it has been empirically shown that growth and globalization are positively related. With growth in standards of living, the country can break the vicious cycle of poverty. Incomes will grow, the people of the country will be able to save and invest, and this saving and investment will fuel growth from within.
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The Fed's decision to concentrate more on interest rates in conducting near-term monetary policy
A) was the result of deregulation and innovation in financial markets. B) was necessitated by the inability to identify a stable demand for money. C) is sometimes misrepresented by the media as the Fed "setting" interest rates. D) all of the above.
Which of the following is not correct?
a. Taxes levied on sellers and taxes levied on buyers are not equivalent. b. A tax places a wedge between the price that buyers pay and the price that sellers receive. c. The wedge between the buyers' price and the sellers' price is the same, regardless of whether the tax is levied on buyers or sellers. d. In the new after-tax equilibrium, buyers and sellers share the burden of the tax.