The reason why public subsidization of industries in less-developed countries causes slow economic growth is that:
a. when companies face no competition, there is no incentive for them to improve their production.
b. too much of the taxpayer's money is spent in these programs.
c. consumers tend to develop an aversion for the purchase of subsidized goods and services.
d. subsidies tend to create too much competition for products.
e. subsidization creates shortage in the product market.
a
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Dominant strategy Nash equilibria are efficient.
Answer the following statement true (T) or false (F)
According to purchasing power parity, a rise in inflation in the United States. relative to the rest of the world will lead to
A) a balance of payments surplus. B) a balance of payments deficit. C) an exchange rate appreciation. D) an exchange rate depreciation.
Which combination of fiscal policy actions would be most stimulative for an economy in a deep recession?
a. Increase taxes and government spending b. Decrease taxes and government spending c. Decrease taxes and increase government spending d. Increase taxes and decrease government spending
A major criticism of industrial regulation is that:
A. it has been applied to virtually all major U.S. corporations in the post-Second World War period. B. marginal cost pricing has created an underallocation of resources. C. by allowing a fair return price, it gives natural monopolists little incentive to contain costs. D. regulatory commissions have frequently caused natural monopolies to go bankrupt.