A major criticism of foreign aid to developing nations is that it:
A. Provides incentives to reduce the role of government
B. Is capital-using rather than capital-saving when it is spent
C. Encourages dependency rather than self-sustained growth
D. Leads to widespread underemployment and unemployment
C. Encourages dependency rather than self-sustained growth
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Kimberly decides to go back to college full time at the age of 30, and finds herself with a much lower income than she was earning before. Now that she has less income, she finds herself eating less steak and more pasta than ever before. We can conclude:
A. steak and pasta are both normal goods, because they are both food she eats regardless of her income. B. steak and pasta are both inferior goods, because they are both food she eats regardless of her income. C. pasta is an inferior good because her demand increased when her income went down. D. steak and pasta are both inferior goods, because they are both food she eats regardless of her income; also, pasta is an inferior good because her demand increased when her income went down.
Under a tying contract,
A. the price a buyer must pay for a good is tied to the size of his or her purchase. B. a customer agrees as a condition of buying a good to purchase one or more additional goods from the same seller. C. a firm agrees to allow members of its competitors’ boards of directors to sit on its board. D. a firm agrees to pay an intermediary for having arranged a business deal for the firm.
Which of the following is the correct sequence of events for this graph?
a. Q1 moves to QSR; Q1 moves to QLR; P1 moves to P2 b. Q1 moves to QSR; P1 moves to P2; Q1 moves to QLR c. P1 moves to P2; Q1 moves to QLR; Q1 moves to QSR d. P1 moves to P2; Q1 moves to QSR; Q1 moves to QLR
Refer to the graph. Economic output in year 0 is $20 billion. What is potential output in year 3?
A. $21.2 billion B. $20 billion C. $20.4 billion D. $20.8 billion