Which of the following factors would be most likely to encourage investment and capital formation in a less-developed nation?
a. High and variable rates of inflation.
b. Tariffs and quotas that restrict international trade.
c. A legal system that provides for secure property rights and evenhanded enforcement of contracts.
d. High marginal tax rates.
c
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Evidence presented in the text suggests that birthrates among developing countries are lower with
(a) higher growth. (b) higher inequality. (c) higher GNP per capita. (d) all of the above.
Richard receives government transfer payments and currently consumes 5 guns and 6 goose livers. Assume the price of guns decreases by 10% and the price of goose liver increases by 20%
The government raises Richard's transfer payments so he can still afford 5 guns and 6 goose livers. Does this constitute a true cost-of-living adjustment (COLA)? A) No. Richard is overcompensated. B) No. Richard is undercompensated. C) Yes. The payment just achieves the right level of compensation. D) Not enough information.
The notion of reciprocity means that one nation will impose import restrictions on another in order to:
a. stimulate an increase in trade restrictions in the latter. b. stimulate a decrease in trade restrictions in the latter. c. eliminate trade restrictions immediately in both countries. d. improve the government revenue collections through tariffs in both countries. e. enforce standards of product quality in the latter.
Demand for a good will always increase when
a. the price of a complementary good falls b. the price of a substitute good falls c. tastes change d. incomes decrease e. the price of the good falls