Krugman_TB_ch11

A b xcessreturnspresentinhighlycompetitivemarkets e c

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Unformatted text preview: ciationʺ of R&D investment in the Federal tax codes. r E) one of the above. N Answer: D Question Status: revious Edition P 2 11) he best economic case one can make for an active industrial policy involves T A) he national security argument. t B) he technological spillover argument. t C) he environment preservation argument. t D) he high value added argument. t E) one of the above. N Answer: E Question Status: revious Edition P 12) pencer and Branderʹs model highlights the existence of S A) ircraft industries. a B) xcess returns present in highly competitive markets. e C) xcess returns, or rents, available in non-competitive markets. e D) he futility of government bureaucratsʹ attempts to build an airplane. t E) one of the above. N Answer: C Question Status: revious Edition P 13) pencer and Branderʹs model highlights the conventional assumption that S A) overnment involvement in business or in the economy tends to fail. g B) overnment subsidies tend to waste taxpayerʹs money. g C) overnment subsidies cannot create a successfully competing export. g D) overnment tends to distort when it displaces Adam Smithʹs Invisible Hand. g E) one of the above. N Answer: E Question Status: revious Edition P 14) he reason Airbus succeeded in the Brander Spencer example is that T A) oeing made the first move in this strategic game. B B) uropeans tend to be better strategists than corn-fed Americans. E C) he Airbus actually was a better plane than the Boeing 747. t D) .S. laws actually prohibit U.S. exporters from bribing foreign officials. U E) one of the above. N Answer: E Question Status: revious Edition P 15) he reason Airbus succeeded in the Brander Spencer example is that T A) he European government made an explicit subsidy offer, but the U.S. government did not. t B) irbusʹ prices were better when adjusted for quality and warranty services. A C) oeing traditionally refused to undertake any exchange rate risk in its transactions. B D) he U.S. acted in accordance with its ideological reliance on market solutions, whereas the Europeans t ignored marke...
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