A developing economy is considering restricting the amount of money its citizens can invest abroad. What might the purpose of this restriction be?
A. to increase the dependency of the economy on developed economics
B. to increase the degree of equality in the income distribution
C. to reduce the nation's trade deficit so that interest rates will be reduced and capital formation will increase
D. to increase capital formation by forcing its citizens to invest in their own country
Answer: D
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Which of the following best explains how consumer spending can decrease even if disposable income remains the same?
a. Supply may decrease, raising the price of many goods.
b. The value of the consumers’ assets, such as stocks or property, might rise.
c. Inflation reduces the purchasing power of consumers’ disposable income.
d. Higher interest rates cause an increase in saving and decrease in spending.
According to Keynesian theory
A. changes in the equilibrium interest rate will not always equate saving and investment. B. prices and wages are flexible downward. C. say's law is valid. D. savers and investors have identical motives.
One essential trade-off involving business risk which the market system provides is reflected in which of the following?
A. Access to the firm's profits and gains are open only to those who take on the business risk of the firm B. Those who receive guaranteed payments from the firm are also guaranteed a share of the firm's profits C. Those who make bad decisions regarding risk will suffer losses; those who decide wisely will gain profits D. Those who bear the business risk of the firm are guaranteed to always gain profits
Human capital can be increased through
A) investment in new technology. B) decreases in population. C) investment in new machinery. D) education, on-the-job training, and work experience. E) increasing the nation's production of consumption goods.