The poverty trap refers to:
A. richer countries spiraling downward into poverty if they invest in the wrong industries.
B. richer countries spiraling downward into poverty if they fail to invest enough in physical capital.
C. poorer countries having a harder time buying the things that will end their poverty.
D. All of these describe the poverty trap.
Answer: C
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Which of the following is NOT true about the duties the Fed performs for the federal government?
A) The U.S. Treasury has a checking account at the Fed. B) The Federal Reserve aids in the purchase and sale of certain government securities. C) The U.S. Treasury controls the Fed. D) The Federal Reserve is the banker and fiscal agent of the federal government.
Suppose a consumer is torn between buying a Chevy Tahoe or a Ford Expedition, each selling for $30,000. He eventually decides on the Tahoe. What's his opportunity cost?
A) $30,000 B) $30,000 plus taxes, tags, insurance, etc. C) The satisfaction he would have experienced owning the Ford Expedition D) The frustration he will face owning the Chevy Tahoe E) B, C, and D above.
If the production of a particular good involves significant external benefits, to force the externality to be internalized the government might:
a. impose a tax on production of the good in order to increase production. b. impose a tax on production of the good in order to decrease production. c. offer a subsidy for production of the good in order to increase production. d. offer a subsidy for production of the good in order to decrease production.
Which of the following statements accurately describes the situation when 1 euro is valued at $2?
a. 2 euros can be exchanged for $1. b. $1 can be exchanged for 0.50 euro. c. 1 euro can be exchanged for $0.50. d. $1 can be exchanged for 1 euro.