The Preferences of Corporations and Governments to Borrow in Foreign

question 84

True/False

The preferences of corporations and governments to borrow in foreign currencies and of investors to make short-term investments in foreign currencies resulted in the creation of the international bond market.

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Definitions:

External Costs

Costs of an economic activity that are not borne by the participants in the activity but are imposed on others, such as pollution.

Competitive Free Market

A market structure where many firms offer products or services that are similar, allowing for free entry and exit, with prices determined by supply and demand forces.

Marginal External Cost

The cost imposed on a third party not involved in a transaction or activity due to an additional unit of production.

Methane Gas

A potent greenhouse gas with a simple chemical formula CH4, commonly produced by the decomposition of organic materials and digestive processes of animals.