Related to the Economics in Practice on p. 626: According to a study cited in the Economics in Practice, if a country is relatively far from the technological frontier of the rest of the world, what would be its best strategy?
A. The government needs to keep helping its firms find the world frontier until the firms reach the frontier.
B. The government should begin by offering incentives and encourage some risk taking.
C. The government needs to help its firms find the world frontier, and then as firms approach the frontier, the government should offer incentives and encourage some risk taking.
D. The government should adopt a hands-off approach and let the private sector bring the country to the world frontier.
Answer: C
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Dr. Goldfinger decides to invest in companies which he believes can "improve the productivity and efficiency" of health care services. How can Dr. Goldfinger strive to achieve this productive efficiency?
A) by investing in companies that fairly distribute their products and services B) by investing in companies that produce goods and services based on consumer preferences C) by investing in companies that produce up to the point where the marginal benefit of the last unit produced is equal to the marginal cost of producing it D) by investing in companies that produce goods and services at the lowest possible cost
According to our basic analysis, the cure for inflation should be fairly straightforward. If the problem is too much aggregate demand
What will be an ideal response?
Scarcity
A. used to be a problem, but is not an issue for modern industrial nations. B. afflicts greedy people only. C. exists in all human societies. D. is a problem for less-developed nations only.
Assume that the government decides to use fiscal or monetary policy to stimulate the economy and that this action comes as a surprise to most individuals and businesses. In the short run, the result will be
A. an increase in aggregate demand and a fall in the price level. B. a decrease in aggregated demand and a rise in the price level. C. a decrease in the average duration of unemployment and a decrease in the unemployment rate. D. an increase in the average duration of unemployment and an increase in the unemployment rate.