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Author Question: Large differences in interest rates between countries would indicate that A) the global market is ... (Read 39 times)

itsmyluck

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on: Jun 30, 2018
Large differences in interest rates between countries would indicate that
 
  A) the global market is thriving.
  B) there is good communication between countries about potential global investment opportunities.
  C) there are unrealized gains from trade.
  D) the market is in danger of collapse.
  E) the supply growth exceeds the aggregate demand.

Question 2

What is the domino effect or contagion?
 
  What will be an ideal response?


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chem1s3

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Reply #1 on: Jun 30, 2018
Answer to Question 1

C

Answer to Question 2

The definition is the vulnerability of even seemingly healthy economies to crisis of confidence generated by events elsewhere in the world. Students should provide examples like the Thai crisis, which provoked another crisis in South Korea, a much larger economy some 7,000 miles away. Or the Russian crisis sparking massive speculation against the Brazil's real.


itsmyluck

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Reply #2 on: Jun 30, 2018
Thank you :)


chem1s3

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Reply #3 on: Jun 30, 2018
Happy to help you


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