Solutions for Chapter Module 41: Capital Flows and the Balance of Payments

Full solutions for Krugman's Economics for AP® (High School) | 2nd Edition

ISBN: 9781464122187

Solutions for Chapter Module 41: Capital Flows and the Balance of Payments

Since 5 problems in chapter Module 41: Capital Flows and the Balance of Payments have been answered, more than 3365 students have viewed full step-by-step solutions from this chapter. Chapter Module 41: Capital Flows and the Balance of Payments includes 5 full step-by-step solutions. Krugman's Economics for AP® (High School) was written by and is associated to the ISBN: 9781464122187. This textbook survival guide was created for the textbook: Krugman's Economics for AP® (High School), edition: 2. This expansive textbook survival guide covers the following chapters and their solutions.

Key Business Terms and definitions covered in this textbook
  • absolute advantage

    the ability to produce a good using fewer inputs than another producer

  • catch-up effect

    the property whereby countries that start off poor tend to grow more rapidly than countries that start off rich

  • Condorcet paradox

    the failure of majority rule to produce transitive preferences for society

  • consumer surplus

    the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it

  • diseconomies of scale

    the property whereby long-run average total cost rises as the quantity of output increases

  • efficiency

    the property of society getting the most it can from its scarce resources

  • excludability

    the property of a good whereby a person can be prevented from using it

  • Federal Reserve (Fed)

    the central bank of the United States

  • free rider

    a person who receives the benefit of a good but avoids paying for it

  • income elasticity of demand

    a measure of how much the quantity demanded of a good responds to a change in consumers’ income, computed as the percentage change in quantity demanded divided by the percentage change in income

  • market failure

    a situation in which a market left on its own fails to allocate resources efficiently

  • natural monopoly

    a monopoly that arises because a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms

  • political economy

    the study of government using the analytic methods of economics

  • price discrimination

    the business practice of selling the same good at different prices to different customers

  • prisoners’ dilemma

    a particular “game” between two captured prisoners that illustrates why cooperation is difficult to maintain even when it is mutually beneficial

  • private saving

    the income that households have left after paying for taxes and consumption

  • public goods

    goods that are neither excludable nor rival in consumption

  • real interest rate

    the interest rate corrected for the effects of inflation

  • sacrifice ratio

    the number of percentage points of annual output lost in the process of reducing inflation by 1 percentage point

  • trade balance

    the value of a nation’s exports minus the value of its imports; also called net exports

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