Political instability is an impediment to development mainly because it:
A. undermines both domestic and foreign investment in a developing country.
B. creates cultural and social differences among groups in developing countries.
C. produces excessive levels of domestic saving.
D. redistributes income.
Answer: A
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An efficient customer sorting rule is one in which
a. customers with high willingness to pay secure the discounted goods b. customers are rationed randomly between the discounted and full price goods c. no customer purchase below her willingness to pay d. customers with the lowest willingness to pay secure the discount goods e. brand loyalty allows the incumbent to retain its regular customers
If it costs the DuPont Chemical Company more to make the chemical flaxinate in the United States than it does to make it in Formosa, the Formosans must have
a. a comparative advantage in producing flaxinate b. cheaper labor c. efficient traders d. greater access to the raw materials that are used to produce flaxinate e. an absolute advantage in flaxinate production
Refer to the graph shown.
If Countries X and Y face the production possibility curves A and B, respectively, Country X has a comparative advantage in the production of:
A. agricultural goods only. B. neither agricultural goods nor industrial goods. C. industrial goods only. D. both agricultural goods and industrial goods.
An increase in real GDP can shift
A) money demand to the right and decrease the equilibrium interest rate. B) money demand to the right and increase the equilibrium interest rate. C) money demand to the left and decrease the equilibrium interest rate. D) money demand to the left and increase the equilibrium interest rate.