1. If patent owners are compensated with monopoly profits from transferred consumer surplus, consumers will be compensated by greater product variety and technological innovation, while the alternative is lower prices, fewer new products, and much less research and development. a. True b. False
2. Greater access to foreign direct investment among developing nations has increased the costs of obtaining investment capital for domestic projects that promote economic growth. a. True b. False
3. Global public goods such as health care are everywhere and are easy to identify without much disagreement. a. True b. False
4. The marginal benefits and costs of pollution abatement are commonly agreed upon, thus no objective analysis that determines the exact costs or benefits should be needed in order to determine the optimal level of social welfare. a. True b. False
5. Portfolio capital inflows can be reversed quickly and cause a financial crisis to worsen. a. True b. False
6. Developing a framework for protecting ownership rights to intellectual property has become a major issue in multilateral trade discussions. a. True b. False
7. A country with poorly developed financial markets may find that controlling short-term capital inflows to be beneficial, but capital controls in countries with highly developed financial markets are likely to be inefficient policies. a. True b. False
8. Ex ante conditionality in which IMF loan conditions are publicly known in advance may reduce asymmetric information problems associated with member nations who seek assistance. a. True b. False
9. There is an incentive to be a free rider when it comes to public goods, thus some type of coercive tax system is needed in order to fund public goods. a. True b. False
10. Adverse selection and herding behavior among lenders can result in many poor investments that go bad. a. True b. False
1. If patent owners are compensated with monopoly profits from transferred consumer surplus, consumers will be compensated by greater product variety and technological innovation, while the alternative is lower prices, fewer new products, and much less research and development. a. True b. False
2. Greater access to foreign direct investment among developing nations has increased the costs of obtaining investment capital for domestic projects that promote economic growth. a. True b. False
3. Global public goods such as health care are everywhere and are easy to identify without much disagreement. a. True b. False
4. The marginal benefits and costs of pollution abatement are commonly agreed upon, thus no objective analysis that determines the exact costs or benefits should be needed in order to determine the optimal level of social welfare. a. True b. False
5. Portfolio capital inflows can be reversed quickly and cause a financial crisis to worsen. a. True b. False
6. Developing a framework for protecting ownership rights to intellectual property has become a major issue in multilateral trade discussions. a. True b. False
7. A country with poorly developed financial markets may find that controlling short-term capital inflows to be beneficial, but capital controls in countries with highly developed financial markets are likely to be inefficient policies. a. True b. False
8. Ex ante conditionality in which IMF loan conditions are publicly known in advance may reduce asymmetric information problems associated with member nations who seek assistance. a. True b. False
9. There is an incentive to be a free rider when it comes to public goods, thus some type of coercive tax system is needed in order to fund public goods. a. True b. False
10. Adverse selection and herding behavior among lenders can result in many poor investments that go bad. a. True b. False
