Author Question: The Basel committee A) takes advantages of loopholes in multinational banks B) does not support ... (Read 39 times)

kodithompson · **on:** Jun 30, 2018

The Basel committee

A) takes advantages of loopholes in multinational banks
B) does not support regulatory agencies that monitor the assets of banks' foreign subsidiaries.
C) submitted its Concordat in 1975 and was then disbanded.
D) continues to be the major forum for cooperation in the regulation of international banking.
E) met for the first time in 1975.

Question 2

Developing countries have often attempted to establish cartels so as to counter the actual or perceived inexorable downward push on the prices of their exported commodities. OPEC is the best well known of these.

How are such cartels expected to help the developing countries? At times importing countries profess support for such schemes. Can you think of any logical basis for such support? How are cartels like monopolies, and how are they different from monopolies. Why is there a presupposition among economists that such schemes are not likely to succeed in the long run?

Fayaz00962 · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

D

Answer to Question 2

Such cartels are expected to shift the exporters' terms of trade in their favor. Also they are expected to produce the maximum profit, which the market will bear. Importing countries may benefit from the price stability generated by the cartel. Cartels are like monopolies in that their total output is the same as that which would be generated by a single monopoly. They differ from monopolies in that the monopoly profits need to be divided among the producing countries, which have different cost structures.