Write an essay that compares and contrasts primary-export-led development policies with import-substitution policies
What will be an ideal response?
Primary-export-led development policies are aimed at encouraging the exports of natural comparative advantage primary products. The hope is that these exports will generate substantial linkage effects that will bring about general economic development. Potential problems in this approach include the possibility of a secular deterioration in the country's terms of trade as well as volatility in world prices. Import-substitution policies seek to promote development by encouraging local industrialization behind initially high trade barriers. This is an example of the infant industry argument for protection. In practice, these policies have had dismal records, as trade barriers have imposed incredible distortions on domestic economies.
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The short-run aggregate supply curve is most likely to shift to the right if ________.
A. productivity decreases B. input prices decrease C. wages increase D. sales taxes increase
The above figure shows the U.S. market for 1 carat diamonds. Area A + area B + area C + area D is the
A) deadweight loss from the import quota. B) importers' profit from the quota. C) decrease in consumer surplus due to the import quota. D) gain in total surplus due to the import quota. E) increase in producer surplus due to the import quota.
A bank panic occurs when
A) a bank is worried that its loans will not be repaid. B) an individual bank cannot meet its reserve requirements. C) a bank lacks sufficient funds with which to make loans. D) the situation in which many banks experience a bank run simultaneously.
If intended investment is $500 billion, and actual investment is $620 billion, then we know that
a. consumption is $620 billion b. unwanted inventory is $620 billion c. consumption is $120 billion d. unwanted inventory is $120 billion e. saving is $500 billion