Why might an economist argue that it could be damaging to the economic growth of a nation if it focused mostly on the production of consumer goods?
What will be an ideal response?
The reason for concern is that focusing too much on the production of consumer goods necessarily implies cutting back on the production of capital goods. The problem is that economic growth is dependent on the production of capital goods.
Difficult: M
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What are the functions for MC and AC if TC = 100q + 100q2? Are the returns to scale increasing, decreasing, or constant?
What will be an ideal response?
If the current margin is greater than the desired margin, the firm should
a. Increase price b. Decrease price c. Not change the price d. Marginal revenue and marginal cost are both zero
One of the great strengths of the market system is the way it acts as an engine of economic growth and innovation
a. True b. False Indicate whether the statement is true or false
A good is excludable if
a. one person's use of the good diminishes another person's enjoyment of it. b. the government can regulate its availability. c. it is not a normal good. d. people can be prevented from using it.