What happens to net capital outflow as the real interest rate falls? Explain your answer
As the real interest rate falls, domestic bonds become less attractive to both domestic and foreign residents and foreign bonds become more attractive. An increase in the purchase of foreign bonds by domestic residents and a decrease in the purchase of domestic bonds by foreign residents both increase net capital outflow.
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Fast food is faster and cheaper than a similar meal you could prepare for yourself. Which of the following does not explain that fact?
a. meal preparation has been divided into many separate tasks b. larger-scale production allows the introduction of more efficient machines c. workers gain productivity at a task over time d. there is less time lost moving from one task to another e. workers are more productive when they are being paid
Risk pooling:
A. reallocates the likelihood of catastrophes happening. B. reallocates the costs of catastrophes when they occur. C. diversifies the risk of catastrophes occurring. D. gathers individuals with similar risks and pools them together.