INTERNATIONAL TRADE
This strategy allows a country with absolute advantage in many industries to still benefit from trade by focusing on what it does most efficiently relative to others.
What is specializing according to comparative advantage?
Voters may avoid researching complex ballot issues because the effort outweighs the personal benefit—an idea described by this term.
What is rational ignorance?
A new investor with $5,000 and little time chooses this investment vehicle to gain diversification and professional management.
What is a mutual fund?
Before using this method to raise money, a company must weigh ownership dilution, regulatory requirements, and timing.
What is an IPO?
This industry, one of Maine’s largest employers, faces rising costs from climate change as warming waters shift where key species can be harvested.
What is the lobster industry?
This type of trade occurs when countries exchange different varieties of the same good, like luxury and economy cars, leading to greater variety and economies of scale.
What is intra-industry trade?
A lawmaker who secures funding for a district project with little national value is engaging in this political practice.
What is pork-barrel spending?
Between annual and monthly compounding at the same interest rate, this option yields a higher return because interest is added more frequently.
What is monthly compounding?
A startup deciding between venture capital and a bank loan might prefer this option if it wants to maintain full control of the business.
What is a bank loan?
Maine’s economy depends heavily on visitors, with this sector making up a significant share of seasonal jobs and small business revenue.
What is the tourism industry?
A tariff on imported textiles protects domestic firms but causes these effects for consumers.
What are higher prices and fewer choices?
This practice increases government spending because legislators trade votes to pass each other’s preferred projects.
What is logrolling?
With the same nominal rate, this compounding schedule, annual or quarterly, produces the higher return.
What is quarterly compounding?
When a bank lends money to a business using depositor funds, it is performing this essential function.
What is the lock-in effect?
This Maine city became a logistics and distribution hub due to its location between Boston and Canada, helping attract more warehousing and shipping companies.
What is Bangor?
Over time, this trade restriction can make domestic companies less efficient by reducing the pressure to innovate.
What is an import quota?
According to this theory, the candidate with the most moderate policy position is most likely to win an election.
What is median voter theory?
A bond with this characteristic will lose more value when interest rates rise, even if another bond has the same coupon rate.
What is a longer duration?
If capital gains taxes rise, investors may hold on to appreciated assets longer to avoid the tax—an effect known as this.
What is the lock-in effect?
Growth in remote work has increased demand for housing in this midcoast region known for high quality of life but limited housing stock.
What is the Freeport–Brunswick area?
Intended to prevent foreign firms from selling below cost, this protection can lead to long-run inefficiency in domestic industries.
What are anti-dumping laws?
A public transit project yields a far higher return than expected. Policymakers use this result to justify allocating more future resources to similar projects.
What is prioritizing high-return public investments?
When market interest rates rise sharply after a fixed-rate bond is issued, this happens to its market price.
What is the price falls?
A company whose credit rating drops from investment-grade to junk status will experience this change in its bond yields.
What is an increase in yields?
Maine’s shift toward renewable energy includes a major focus on this power source, supported by the state’s long coastline and strong wind patterns.
What is offshore wind energy?