In the early 2000s, some argued that the Indian government impeded foreign investment with tariffs, investment caps, and tons of red tape. In terms of promoting or retarding economic growth, such policies:
A. increase growth because they keep people producing for the local market.
B. decrease growth because they slow the growth of capital.
C. increase growth because they stop exploitation by foreigners.
D. decrease growth because they cause inflation.
Answer: B
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Refer to the table above. If the six highest-value buyers and the six least-cost sellers engage in trade, what is the social surplus?
A) $6 B) $8 C) $10 D) $12
Risk pooling:
A. reduces the chances of catastrophes happening. B. lowers the costs of catastrophes when they occur. C. allows individuals the peace of mind that they will never have to pay the full expense of a catastrophe if it hits them. D. All of these statements are true.
In the money market, an increase in money supply will: a. increase the demand for money at each interest rate
b. decrease the demand for money at each interest rate. c. encourage people to exchange money for interest-bearing assets. d. encourage people to exchange interest-bearing assets for money. e. increase the interest rate.
The excess burden of a tax is $5,000 and the tax revenue from this tax is $15,000. The total burden of this tax is
A. $3,000. B. $5,000. C. $10,000. D. $20,000.