Explain the meaning of the word "convergence" in the context of economic growth and standards of living
What will be an ideal response?
Convergence is a term that describes a prediction of the economic growth model. The prediction states that the profitability of using additional capital or better technology is generally greater in developing countries than in a high-income country. This means that poorer countries ought to grow more rapidly than rich countries and as a result, they should eventually catch up to the richer countries. This phenomenon is also called catch-up.
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Pollution is an example of a negative externality.
Answer the following statement true (T) or false (F)
If the firms in an oligopolistic industry can collude effectively (from the firms' viewpoints), the resulting price and output in the market will be most similar to that of
a. a competitive price-searcher market. b. pure monopoly. c. bilateral monopoly. d. a competitive price-taker market.
Which market structure(s) is(are) imperfectly competitive?
If a central bank were required to target inflation at zero, then when there was a positive aggregate supply shock the central bank
a. would have to increase the interest rate. This would move unemployment closer to the natural rate. b. would have to increase the interest rate. This would move unemployment further from the natural rate. c. would have to decrease the interest rate. This would move unemployment closer to the natural rate. d. would have to decrease the interest rate. This would move unemployment further from the natural rate.