Author Question: Which of the following statements about capital markets is true? A) At one time, the U.S. capital ... (Read 138 times)

Cooldude101 · **on:** Jun 29, 2018

Which of the following statements about capital markets is true?

A) At one time, the U.S. capital market was larger than all other capital markets combined, but that is no longer the case.
B) The U.S. capital market is currently larger than all other capital markets combined.
C) The largest capital markets in the world today are in East Asia and Latin America.
D) There are currently large capital markets in Europe, but none in Asia.

Question 2

In many developing countries, starting a business involves navigating a labyrinth of rules and regulations and red tape. Paying a bribe to expedite paperwork is a common practice.

As Samuel Huntington puts itthe only thing worse than a society with a rigid, overcentralized, dishonest bureaucracy is one with a rigid, overcentralized, honest bureaucracy. The argument is that bribes increase economic activity because, without bribes to grease bureaucrats' palms, starting a business would be an extremely long, drawn-out process and would probably drive investors away. Is this always the case, or does bureaucratic corruption involve other costs? Explain your answer.

gabrielle_lawrence · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

A

Answer to Question 2

Most evidence suggests that bureaucratic corruption actually lowers economic efficiency. Although paying a bribe may ensure that economic activity proceeds smoothly, it is a highly inefficient way of getting things done. The resources that are used to pay bribes could have been utilized toward more productive activities in the economy. Also, citizens interact with government officials and bureaucrats very often. Once bribery becomes endemic in a society, it becomes very difficult to control. This makes bureaucratic corruption even more challenging than political corruption.
A-head: CONTROLLING POLITICIANS
Concept: Bureaucratic corruption