1. The economist Alan Blinder said that any economist who mows his own lawn probably has not understood the concept of comparative advantage. Would you agree with Professor Blinder.
2. Explain how the use of collateral in financial markets can lessen the effects of asymmetric information in the form of aderverse selection.
3. What is foreign direct investment? Explain with an example. How does foreign direct investment benefit the recipient country?
4. Distinguish among flexible, fixed, and managed exchange rates. Provide an example of each.