Many spokespersons of African countries complain that the U.S. and other developed countries heavily subsidize cotton. What is the reason for their discontent and what argument are they making with respect to their own economic development?
What will be an ideal response?
They argue that the subsidies lead to worldwide overproduction and distort cotton prices, depriving poor African countries of one of their few goods for which they have a comparative advantage in international trade. Not only is cotton crucial to their economies, it is the often the sole agricultural product for their countries to trade.
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The role that dead capital plays in a country's economic growth is that
A) growth increases since the firms using the dead capital are using it for free. B) growth increases because the dead capital is replaced with more technologically efficient capital. C) growth neither increases nor is impaired by dead capital. D) growth is impaired since the capital cannot be allocated to its most efficient use.
Typically a firm's economic profit will be
A) greater than its accounting profit. B) less than its accounting profit. C) equal to its accounting profit. D) equal to its accounting profit minus its tax liability. E) equal to its accounting profit plus the market value of any unsold inventory.
An increase in net exports shifts the aggregate demand curve to the left.
a. true b. false
Why do very small differences in annual growth rates amount to big differences in the degree of long-term economic growth?
A. because the faster-growing countries gain a political advantage over poorer countries, and use that advantage for their economic gain B. because the slower-growing countries save too much C. because the annual growth rate is compounded over time D. because the slower-growing countries don't export enough