What are the roots of the persistent famines in sub-Saharan Africa?
What will be an ideal response?
The immediate cause of famine is drought. Other causes are more complex. Civil strife has torn many nations for decades. Population growth has outstripped food production in many nations. Ecological degradation has occurred in nations that use marginal land for crop production. There are also poor public policies. Some governments spend four times as much on arms as they do on agriculture. Many African governments have followed the policy of establishing prices of agricultural goods at low levels to provide cheap food, but it diminishes incentives to produce. These nations also have large external debts to service. Paying interest on these debts can require governments to cut spending for health care, education, and infrastructure that only compound the problems. Even if the droughts end, the other problems will remain.
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In the short run, which of the following actions raises the interest rate?
A) a decrease in the demand for money B) an increase in bond prices C) an increase in the quantity of money D) an increase in the demand for money
Monetarists argue that the interest elasticity of the demand for money is
a. low, while Keynesians say it is high. b. important in terms of affecting economic activity. c. highly variable. d. an important factor in determining if velocity is stable or unstable.
Horizontal and vertical demand curves
A) have constant elasticities. B) are not possible in the real world. C) have elasticities that change with price. D) cannot have their elasticities computed using the point method.
According to research by William Shepherd, competition has increased in U.S. industries since World War II due to
a. both c and d b. all of the following c. international trade d. deregulation e. antitrust activity