What benefits did an overvalued currency offer a domestic economy in the ISI period? Which sectors were typically harmed by overvalued currencies?
What will be an ideal response?
Overvalued exchange rates made it easier for targeted industries to buy imported capital goods and kept urban workers more allied with political leaders because foreign goods were relatively less expensive. It made it difficult to export, especially for the traditional commodity producers, which hurt investment and income in rural areas. Non-targeted industries lost sales and production. Industrial investment was too capital intensive and unable to create jobs fast enough to absorb labor leaving rural areas.
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Suppose a perfectly competitive firm and a monopolist are both charging $5 for their respective products. From this, one can infer that:
A. the competitive firm is charging too much, and the monopolist is charging too little. B. the marginal benefit from selling an additional unit of output is $5 for the competitive firm and less than $5 for the monopolist. C. the marginal benefit from selling an additional unit of output is $5 for both firms. D. the marginal benefit from selling an additional unit of output is less than $5 for both firms.
The $400 dividend check a stockholder receives is included in aggregate accounting as:
A. profits. B. interest. C. rents. D. employee compensation.
A group of 100 people seek out an insurance company to underwrite health insurance for its members. If expected medical spending for the group is $150,000, what will the average premium be if the health insurance company estimates the premium adding net loading costs of 20 percent?
a. $1,200 b. $1,500 c. $1,800 d. $3,000
Other things constant, which of the following would you expect to increase the output growth rate of a country?
a. an increase in the rate of taxation on personal income b. an increase in the rate of investment as a share of total output c. passage of regulations restricting international trade d. passage of regulations restricting domestic trade