Over the 1980s and 1990s, countries with sound fiscal, monetary, and trade policies and strong rule of law combined with large amounts of aid:

A. still failed to grow, indicating new methods for furthering development are needed.
B. grew at 1 percent, indicating the necessity of good policy in conjunction with aid.
C. saw GDP shrink by 1 percent, indicating corruption and inefficient use of funds is rampant.
D. None of these statements is true.


Answer: B

Economics

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Failure to follow the treatment protocol means that

A) the OLS estimator cannot be computed. B) instrumental variables estimation of the treatment effect should be used where the initial random assignment is the instrument for the treatment actually received. C) you should use the TSLS estimator and regress the outcome variable Y on the initial random assignment in the first stage to get predicted values of the outcome variable. D) the Hawthorne effect plays a crucial role.

Economics

Suppose two firms are in a game situation, and they each must decide on a strategy regarding whether to select a high price or a low price Profits for a firm are highest when it selects a low price, while the other selects a high price; profits are lowest if one selects a high price, while the other selects a low price; profits are in between when both select low prices; and profits are slightly higher when both select high prices. In the absence of collusion we expect

A) one of the firms to select a high price and the other a low price. B) one firm to select a high price and the other a low price in the first period, followed by a reversal in the second period. C) both to select high prices. D) both to select low prices.

Economics

Figure 4-1


illustrates the market for compact discs. If the government imposes a price floor of $25 for compact discs, which of the following will be true?
a.
Consumers would wish to purchase 1,000 compact discs.
b.
Producers would wish to sell 5,000 compact discs.
c.
There would be a surplus of 4,000 compact discs.
d.
All of the above are true.

Economics

Assume that there is no way to prevent someone from using an interstate highway, regardless of whether or not she helps pay for it. This characteristic is associated with:

A. rival goods. B. complementary goods. C. capital goods. D. public goods.

Economics