Several arguments suggest that low-income countries might have an advantage achieving greater worker productivity and economic growth in the future. Give two such arguments
The first argument is based on diminishing marginal returns. Even though deepening human and physical capital will tend to increase per capita GDP, the law of diminishing returns suggests that as an economy continues to increase its human and physical capital, the marginal gains to economic growth will diminish. The second argument is that low-income countries may find it easier to improve their technologies than high-income countries as they can observe the experience of those countries that have grown more quickly and can learn from it.
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Because of a decrease in labor costs, a monopoly finds that its marginal cost and average total cost have decreased. The monopoly ________ its price and ________ its quantity
A) raises; increases B) raises; decreases C) lowers; increases D) lowers; decreases
Determine whether each of the following is a positive or normative statement. (a) The Fed should lower interest rates to increase economic growth, because we're in a recession. (b) Higher government budget deficits cause higher interest rates
(c) The trade deficit should decline because of the fall in the value of the dollar. (d) Because of our high inflation rate, we must reduce the rate of money growth. (e) A generous unemployment insurance system is a primary cause of high unemployment in Europe. (f) Increased average labor productivity in a country should lead to faster growth. (g) Government budget deficits are too high in the United States and should be reduced.
In the United States, all levels of government together spend about
a. one out of every three dollars paid for finished goods and services b. half of the dollars paid for defense spending c. the same amount as private citizens and corporations d. one out of every three dollars paid for education e. 80 percent of their budgets on transfer payments
Which of the following is an unconventional monetary policy?
A. Lending to banks in unprecedented volume B. Lending to companies other than banks C. Reducing the federal funds rate to zero D. All of these are unconventional monetary policies.