According to the Solow model, can a country have capital deepening without any limit?
What will be an ideal response?
No. Capital deepening will halt when depreciation catches up with total saving.
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Explicit costs are
A) costs that are measured in dollars. B) costs that do not involve an exchange of money. C) the same as opportunity costs. D) the same as implicit costs.
What is the distinction between gross investment and net investment?
What will be an ideal response?
Regarding the relationship between marginal profit and average profit, which of the following statements is NOT true?
A. If the average profit is rising, the marginal profit figure must be rising. B. If marginal profit is lower than average profit, then average profit must decrease when profit increases. C. If marginal profit is below average profit, the average profit decreases. D. All of these statements are true.
Arguments in support of protectionism (and against free trade) include all of the following EXCEPT
A) new and troubled industries need to be protected until they acquire sufficient strength to compete equally against their foreign counterparts.
B) jobs at home should be protected from cheap foreign labor.
C) protectionism increase total domestic consumption possibilities.
D) national security interests require that nations retain the ability to produce vital materials at home and avoid dependence upon potential enemies.