What is convergence hypothesis? Why should we expect convergence in the long run?
The convergence hypothesis holds that nations with low levels of productivity tend to have high productivity growth rates, so that international productivity differences shrink over time. In some poor countries, the supply of capital may be growing very rapidly. In others, educational attainment may be rising quickly, albeit from a low base. But the main reason to expect convergence in the long run is that low-productivity countries should be able to learn from high-productivity countries as scientific and managerial know-how spreads around the world.
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The data lag is
A) the time it takes for policy makers to obtain data indicating what is happening in the economy. B) the time it takes for policy makers to be sure of what the data are signaling about the future course of the economy. C) the time it takes to pass legislation to implement a particular policy. D) the time it takes for policy makers to change policy instruments once they have decided on the new policy. E) the time it takes for the policy actually to have an impact on the economy.
In Eugene, Oregon, next year there is a 2% chance of an earthquake severe enough to destroy all buildings and personal property
Quincy, who has $3,000,000 in buildings and personal property, has the opportunity to purchase complete earthquake insurance. Which is true? A) Quincy should not purchase earthquake insurance unless he can get it for less than $60,000, because that's all he could possibly lose in an earthquake. B) Quincy should not purchase earthquake insurance unless he can get it for less than $60,000, because that's his expected loss in an earthquake. C) If Quincy buys earthquake insurance, and an earthquake does not occur, he will have received no utility from the transaction. D) What Quincy is willing to pay for the earthquake insurance depends upon his degree of risk aversion. E) Quincy should be willing and able to pay up to $3,000,000 for earthquake insurance.
Explain the difference between a change in demand and a change in quantity demanded. Be sure to specify what causes each to change and how they differ when graphed
Partially-flexible exchange rates:
A. produce fewer exchange rate changes in general than fixed exchange rates. B. provide governments with a more independent monetary policy than flexible exchange rates. C. mix market forces with government intervention in a way that permits the exchange rate to respond to long-term balance of payments problems. D. mix market forces with government intervention in a way that allows exchange rates to respond to speculative pressures.