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Question 25
False:
Free mobility of capital is not necessarily beneficial for the capital-importing country. Perfect
mobility will lead to higher long-run capital stock, income and consumption for the capital-
exporting country, while it leads to exactly the opposite outcome for the capital-importing
country. It brings about lower (per capita) capital stock, income and consumption for the capital-
importing country. Hence, Given the choice between free labor mobility and free capital
mobility, the Solow model does not imply that free capital mobility is always more effective at
improving welfare.
Question 23
True:
The economic meaning of the intertemporal budget constraint is that the present discounted
value of the government's budget must balance.
Question 22
When financial markets are efficient, the price of a security such as a share of a particular
corporation’s common stock should be equal to the present value estimate. This statement is
consistent with: Weak Form of Efficiency (Only past data can determine price movements)
There will be some volatility in the stock price when the earnings report is released, but it is
difficult to determine the impact on the stock price. (As weak form markets cant predict stock
movements)

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Question 25 False: Free mobility of capital is not necessarily beneficial for the capital-importing country. Perfect mobility will lead to higher long-run capital stock, income and consumption for the capitalexporting country, while it leads to exactly the opposite outcome for the capital-importing country. It brings about lower (per capita) capital stock, income and consumption for the capitalimporting country. Hence, Given the choice between free labor mobility and free capital mobility, the Solow model does not imply that free capital mobility is always more effective at improving welfare. Question 23 True: The economic meaning of the intertemporal budget constraint is that the present discounted value of the government's budget must balance. Question 22 When financial markets are efficient, the price of a security such as a share of a particular corporation’s common stock should be equal to the present value estimate. This statement is consistent with: Weak Form of Efficiency (Only past data can determine price movements) There will be some volatility in the stock price when the earnings report is released, but it is difficult to determine the impact on the stock price. (As weak form markets cant predict stock movements) Name: Description: ...
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