What are some of the key economic factors that characterize countries with poor growth records?
Low-growth countries tend to share certain characteristics, among them poorly defined private property rights and restrictions that prevent market competition from increasing the value of resources. High and variable rates of inflation also harm a country's economy. Restrictions on international trade prevent citizens from benefiting from comparative advantage, and poorly functioning capital markets prevent citizens from being productive in their own country. Finally, high marginal tax rates discourage legitimate work and reduce the incentive to be productive.
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An effluent fee is imposed on a steel firm to reduce the amount of waste materials that it dumps in a river. Use the following two statements to answer this question:
I. The more easily factors of production can be substituted for one another (for example, capital can be used to reduce waste water), the more effective the fee will be in reducing effluent. II. The greater the degree of substitution of capital for waste water, the less the firm will have to pay in effluent fees. A) Both I and II are true. B) I is true, and II is false. C) I is false, and II is true. D) Both I and II are false.
Which of the following statements is not correct?
a. A gasoline tax can be an example of a tax that uses the benefits principle. b. A progressive tax attempts to achieve vertical equity. c. A progressive tax can be an example of the ability-to-pay principle. d. A regressive tax attempts to achieve vertical equity.
As new firms enter a monopolistic competitive industry, it can be expected that:
A. market price will increase. B. the output of existing firms will increase. C. profits of existing firms will increase. D. profits of existing firms will decrease.
The United States has a trade deficit when the value of the goods and services we import exceeds the value of the goods and services we export.
Answer the following statement true (T) or false (F)