According to the dependence theory, the developing world is known as the

Which is the best characterization of the current international payments system?

A) The World Bank and the IMF approve nations' exchange rate regimes and ensure that financial flows are not hampered by imbalances. B) All nations are now operating with floating exchange rates and free capital flows. C) The four richest industrial nations have floating exchange rates, while the rest of the nations peg to those currencies. D) There is no standard and no rules, and each nation chooses the regime that works best for its individual situation at the time.

Refer to Figure 5-1. If, because of an externality, the economically efficient output is Q2 and not the current equilibrium output of Q1, what does S2 represent?

A) the market supply curve reflecting marginal social cost B) the market supply curve reflecting implicit cost C) the market supply curve reflecting marginal private cost D) the market supply curve reflecting external cost