Chapter 1 - Chapter 1 Problem of Scarcity: Theory of...

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Chapter 1 Problem of Scarcity: Theory of comparative advantage : Impact of international trade: What does America do best? The type of ---- and ---- in which people live affects the way they behave Capitalism Socialism Communism Amount of economic freedom Economic incentives Amount of competition The role of the government Goal of corporations/ firms Discipline of the market place System of property rights example Sum up Communists in one sentence: Fathers of Communism: What should be used to measure stockholders’ wealth? Why not dollar profit? Should financial decision makers do anything in their power to increase the wealth of the stockholders? If markets were perfect, what adjustments would take place between a high wage and a low wage country? If markets were perfect, what adjustments would take place between a high interest rate country and a low interest rate country? Why are markets imperfect in the real world? The
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This note was uploaded on 07/15/2008 for the course FINC 445 taught by Professor Martindale during the Summer '08 term at Texas A&M.

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Chapter 1 - Chapter 1 Problem of Scarcity: Theory of...

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