The government policy that does not increase economic growth is
A. incentives to firms in the form of investment tax credits that can take the economy out of a low saving-investment trap
B. foreign trade policy that favors imposing a high tariff on imported high-tech goods
C. better health and education policies that provide free childhood vaccination, water purification, and K-12 public education
D. policy concerning property rights and rules of law that can free the country from corruption and political instability
Ans: B. foreign trade policy that favors imposing a high tariff on imported high-tech goods
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As a firm hires more and more workers:
A) the value of marginal product of the additional workers eventually increases. B) the marginal product of the additional workers remains the same. C) the value of marginal product of the additional workers remains the same. D) the value of marginal product of the additional workers eventually decreases.
Table 36-1Suppose the economy of Macroland is described by the following:C = 200 + 0.8 DI (DI = disposable income)I = 300 + 0.2Y?50r (Y = GDP)(r, the interest rate, is measured in percentage points. For example, a 9 percent interest rate is r = 9).For this economy, assume that the Federal Reserve uses its monetary policy to peg the interest rate atr = 5G = 750T = 0.25YX = 200M = 150 + 0.2YHint: DI = Y?T From Table 36-1, compute equilibrium GDP for Macroland.
A. 3,000 B. 2,950 C. 2,625 D. 2,525
Comparative advantage cannot account for a significant portion of world trade
Indicate whether the statement is true or false
According to the Department of Justice merger guidelines, a proposed merger between two firms may be challenged if the post-merger Herfindahl-Hirschman Index
A) lies between 1,500 and 2,500 and the merger raises the Index by 50 points. B) lies between 1,500 and 2,500 and the merger raises the Index by more than 100 points. C) lies above 2,500 and the merger raises the Index by less than 50 points. D) lies below 1,000 and the merger raises the Index by 100 points.