How is the international economy qualitatively different in the first part of the twenty-first century from what it was like in the first part of the twentieth century?
What will be an ideal response?
Since tariffs and quotas have been reduced (and would have been the common barriers in the past), now nations are addressing issues related to deeper levels of integration, which involve domestic policies such as labor or environmental standards or investment policies. Today there are multilateral international governmental organizations that address global economic issues where none existed then. There has been a significant increase in the number of regional trade agreements.
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Suppose a firm's short-run production function is given by Q = F(L) = 4L. If the wage rate is $12 and the firm has sunk costs of $300, then the firm's variable cost function is:
A. VC(Q) = $12Q. B. VC(L) = $3L. C. VC(Q) = $3Q. D. VC(Q) = $300 + $12Q.
Giving the Fed a high degree of independence means all but:
A. the Fed governors will not be as tempted by political pressure. B. it is less likely to expand the money supply simply to make it cheaper for the government to repay its debt. C. The federal government will not have to borrow to finance its budget deficit. D. technocrats-rather than politicians-are in charge, which tends to increase people's trust in the stability of the dollar.