"Take thou no usury of him, or increase, but fear thy God, that thy brother may live with thee" (Leviticus 25:36). Thus biblical instruction was the foundation for usury laws, both ancient and modern, and to an economist represent an early example of
a. price floors
b. price ceilings
c. target prices
d. deficiency payments
e. market-determined prices
B
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Use the following table with data for a private closed economy (an economy with only a private sector and no international trade) to answer the next question. All figures are in billions of dollars.Expected Rate of ReturnInvestmentConsumptionGDP10%$0$400$4008100500600620060080043007001,00024008001,20005009001,400If the real rate of interest is 2%, then the equilibrium level of real GDP will be
A. $800 billion. B. $1,200 billion. C. $1,400 billion. D. $1,000 billion.
Assume the economy is closed and that it is operating at full employment. Which statement is TRUE when the size of the budget deficit decreases?
A) The increased amount of public goods will crowd out privately produced goods. B) A reduction in the growth of productivity, and a reduction in society's standard of living will occur. C) The interest rate will decrease, leading to an increase in investment and capital formation. D) Demand and supply of credit will increase.
The notion that technological change is not random but instead is driven by the pursuit of profits is an essential element of
A) classical growth theory. B) neoclassical growth theory. C) the new growth theory. D) perpetual growth theory.
In a command economy, a planning agency sets prices for various inputs and final goods. In a market economy, supply and demand decide the prices of various goods. In both cases, there is a set of prices operating in the economy
Then why are market economies considered more efficient than planned economies?