What are the three types of gains from international transactions between the residents of different countries?
What will be an ideal response?
The three types are:
(1 ) Gains due to comparative advantage and economies of scale.
(2 ) Gains due to inter-temporal trade, which is the exchange of goods and services for claims to future goods and services, which is for assets.
(3 ) Gains due to trades of assets for assets, such as the exchange of real estate located in London for U.S. Treasury bonds.
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Private solutions to externalities are most effective if ________
A) transaction costs associated with bargaining are low B) transaction costs associated with bargaining are high C) property rights are not defined clearly D) a large number of people are affected by the externalities
Using the above figure, which of the lines in the above diagram represents a progressive tax?
A) A B) B C) C D) none of them