Which of the following is most important if a country is going to achieve and sustain rapid economic growth?
a. large government expenditures as a share of GDP
b. institutions and policies that are supportive of competition (open markets) and freedom of exchange.
c. free elections and political democracy
d. monetary policy makers who are willing to expand the supply of money rapidly
B
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When actual output is less than potential output, there is ________ output gap and the inflation rate will ________.
A. an expansionary; be lower than the expected rate of inflation B. a recessionary; exceed the expected rate of inflation C. a recessionary; be lower than the expected rate of inflation D. an expansionary; exceed the expected rate of inflation
A 45-degree line on a graph with expenditures, E, on the vertical axis and production, Y, on the horizontal axis, represents
A) the line of disequilibrium levels of income. B) all possible equilibrium levels of production and expenditures. C) some of the equilibrium levels of production and expenditures. D) None of the above.
A market situation in which a large number of firms produce similar but not identical products is called
A) pure monopoly. B) monopolistically competitive. C) oligopolistic behavior. D) perfectly competitive.
Which of the following is a result of discrimination?
A. Two groups of workers earning different wages. B. Two groups of workers paid the same wage, but proportionally fewer of one group are employed. C. Equal pay and equal employment opportunities for two groups of workers with different productivities. D. No workers from a particular group are employed.