The basic problem with the existence of dead capital is that
A. since there is no cost to dead capital, there is an incentive to overinvest.
B. dead capital cannot be put to any use since there is no ownership.
C. with no clear ownership, dead capital often cannot be transferred to its most efficient use.
D. dead capital creates government inefficiency, bureaucracy, and excessive regulation.
The answer is C. with no clear ownership, dead capital often cannot be transferred to its most efficient use.
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When China embarked on market changes towards urbanization and manufacturing in 1978, urban disposable incomes were 2.6 times greater than rural net income. By 2008 they were 3.3 times bigger. These market changes have led to
A) increased income inequality between rural and urban populations. B) a decreased Gini ratio. C) the Lorenz curve for income to move closer to the line of equality. D) a movement towards a bell-shaped distribution of income.
If the purchasing power of a dollar is greater than the purchasing power of the yen, purchasing power parity would predict that
A) in the short run, interest rates will move to equalize the purchasing power of the dollar and the yen. B) in the long run, exchange rates will move to equalize the purchasing power of the dollar and the yen. C) in the short run, exchange rates will move to equalize the purchasing power of the dollar and the yen. D) in the long run, interest rates will move to equalize the purchasing power of the dollar and the yen.
When a nuclear-powered electrical plant is permitted to dump radioactive waste at no cost into a recreational waterway lowering the value boaters receive from the waterway, the
a. firm's cost of producing electricity will be higher than the community's true opportunity cost. b. firm will tend to produce too little electricity from the viewpoint of economic efficiency. c. community generally receives an external benefit from the production of electricity. d. firm's cost of producing electricity will be lower than the community's true opportunity cost.
Which of the following is a correct statement?
a. Fiscal policy is the use of tax and spending policies by Congress and the president. b. Fiscal policy involves the control of the money supply by the Federal Reserve Bank. c. Monetary policy involves the control of the money supply by Congress and the president. d. Monetary policy is the use of tax and spending policies by the Federal Reserve Bank.