The competitive market system:
A. encourages innovation because government provides tax breaks and subsidies to those
who develop new products or new productive techniques.
B. discourages innovation because it is difficult to acquire additional capital in the form of new
machinery and equipment.
C. discourages innovation because firms want to get all the profits possible from existing
machinery and equipment.
D. encourages innovation because successful innovators are rewarded with economic profits.
Answer: D
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Raul Prebisch was an Argentine economist who argued that
A) the terms of trade would decline for primary commodity exports. B) the terms of trade would decline for manufactured goods exports. C) imports substitution policies were a solution to export pessimism. D) Both A and C. E) Both B and C.
This agency develops and enforces environmental standards for air, water, toxic waste, and noise
A) Environmental Protection Agency B) Consumer Product Safety Commission C) Equal Employment Opportunity Commission D) Occupational Safety and Health Administration
Planned investment is inversely related to the interest rate because the higher the interest rate, the higher the rate of return on investment projects
a. True b. False Indicate whether the statement is true or false
Figure 10-5
In Figure 10-5, which graph best illustrates the situation of an economy near full employment that experiences an increase in autonomous consumer spending?
a.
(1)
b.
(2)
c.
(3)
d.
(4)