Identify the six basic requirements that economists generally agree must exist for a successful transition from socialism to a market-based system
What will be an ideal response?
1) Macroeconomic stabilization; 2) Deregulation of prices and liberalization of trade; 3) Privatization of state-owned enterprises and development of new private industry; 4) The establishment of market-supporting institutions, such as property and contract laws, accounting systems, and so forth; 5) A social safety net to deal with unemployment and poverty; and 6) External assistance.
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In the figure above, suppose the demand for dollars temporarily decreases so that the demand curve shifts to D2. To maintain the target exchange rate, the Fed
A) can sell dollars. B) can buy dollars. C) must violate both interest rate parity and purchasing power parity. D) cannot maintain the target exchange rate.
A nation should specialize in the production of the product for which it has a(n):
a. absolute advantage. b. exchange rate. c. specialization. d. comparative advantage. e. terms of trade.
Patent and copyright laws
a. encourage creative activity. b. promote competition among firms. c. discourage creative activity. d. Both a and b are correct.
The maximum increase in the money supply possible from a deposit of $D into the banking system where R is the reserve requirement is
A. (1 / R)(D? R). B. R× D. C. (1 / R)(1 ? R)D. D. (1 / R)D.