____ occurs whenever a third party receives or bears costs arising from an economic transaction in which the individual (or group) is not a direct participant
a. Pecuniary benefits and costs
b. Externalities
c. Intangibles
d. Monopoly costs and benefits
e. none of the above
b
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Crowding out occurs when expansionary fiscal policy leads to
A) a higher money supply and a reduction in net exports. B) a higher money supply and a reduction in the interest rate. C) a higher interest rate and a reduction in private investment. D) a higher price level and a reduction in the money supply.
If a bottle of fine French wine costs US$250 in the U.S., 2500 rand in South Africa, there are no transaction costs, and the exchange rate is 20 rand/US$, then
A) there is an arbitrage opportunity by buying the wine in the U.S., and selling it in South Africa and the price in South Africa will drop. B) there is an arbitrage opportunity by buying the wine in South Africa., and selling it in the U.S. and the price in the U.S. will drop. C) here is an arbitrage opportunity by buying the wine in South Africa., and selling it in the U.S. and the price in the U.S. will rise. D) there is no arbitrage opportunity.