Well-established property rights and a pro-business climate are a step in the right direction, but ultimately they do little to encourage economic growth.
Answer the following statement true (T) or false (F)
False
Land, property, and contract rights have to be established before farmers will voluntarily improve their land or invest in agricultural technology. Unleashing the 'animal spirits' of the marketplace is also critical. People respond to incentives. If farmers see the potential for profit-and the opportunity to keep that profit-they will pursue productivity gains with more vigor. Finally, pro-business climates encourage the capital investment, the entrepreneurship, and the human capital investment that drive economic growth.
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Under the fixed rate regime foreign countries could hold their dollar exchange rates constant by
A) using tight monetary policy. B) using expansionary fiscal policy. C) negotiating with the central bank of the United States. D) setting their domestic interest rate equal to the U.S. interest rate. E) holding their exchange rates constantly pegged to the euro and yen.
If R2 is less than 1
A) the regression analysis is incorrect. B) the observation data is suspect. C) some observations do not lie on the regression line. D) the probability of having the correct fit is very low.
Unemployment caused by a recession is called:
a. structural unemployment. b. frictional unemployment. c. involuntary unemployment. d. cyclical unemployment
If you take $500 out of a savings deposit and put it into a checking account, the immediate effect (do not consider the money multiplier):
a. M1 rises, M2 rises, and the monetary base remains the same. b. M1, M2, and the monetary base rise. c. M1, M2, and the monetary base fall. d. M1, M2, and the monetary base remain the same. e. M1 rises, M2 remains the same, and the monetary base remains the same.