Q. The availability of investment capital is critical for a market economy to grow. Explain how this investment capital is transformed into fixed capital goods, new technology, and cost reduction using new methods of production. Also, explain how interest rates impact the availability of investment capital.
2. Lists three arguments for trade restrictions. Since economists do not favor trade restrictions, make the case as an economist against trade restrictions for these three items. Are there any arguments for trade restrictions that most economists would support? Discuss.
3. Who was responsible for the global financial crisis of 2007-2009? Free-Market capitalism, government intervention, or a combination of both? Identify the causes of the crisis, the steps the private and public sector took to resolve it, and what leaders should do to keep it from happening again. Banks are profit making firms who supply capital to suppliers of goods and services.