Why does continued foreign investment in U.S. stocks and bonds and foreign companies continuing to build factories in the United States result in a current account deficit in the United States?
What will be an ideal response?
The willingness of foreign investors and companies to purchase financial and physical assets in the United States leads to a U.S. financial account surplus. If the United States runs a financial account surplus, it must run a current account deficit.
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What gives rise to a natural monopoly? How do consumers benefit from a natural monopoly?
What will be an ideal response?
The main difference between the price-quantity graph of a perfectly competitive firm and a monopoly is
A) that the competitive firm's demand curve is horizontal, while that of the monopoly is downward sloping. B) that a monopoly always earns an economic profit while a competitive company always earns only normal profit. C) that a monopoly maximizes its profit when marginal revenue is greater than marginal cost. D) that a monopoly does not incur increasing marginal cost.