In the steady state of Solow's exogenous growth model, an increase in the savings rate
A) increases output per worker and increases capital per worker.
B) increases output per worker and decreases capital per worker.
C) decreases output per worker and increases capital per worker.
D) decreases output per worker and decreases capital per worker.
A
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The high correlation between rapid growth in exports and rapid economic growth observed in several East Asia countries in recent decades
A) proves that export promoting trade policy leads to relatively rapid economic growth. B) proves that a free-trade orientation of trade policy results in rapid economic growth. C) proves that exports help growth, whereas imports impede growth. D) proves that trade policy is the most important policy area for promotion of economic development. E) does not prove that trade liberalization always leads to rapid economic growth.
A market failure in the form of an externality arises when
a. production costs are included in the price of a good b. not all costs and benefits are included in the price of a good c. the benefits of consuming a good exceed the costs d. a market fails to achieve equilibrium e. equilibrium price is unstable
In 2012, more than 60% of the privately held national debt was held by
a. foreign investors. b. Federal Reserve banks. c. large corporations. d. government trust funds.
In the circular economic flow diagram, households:
A. make consumption expenditures and pay for land, labor, and capital. B. receive money income and supply resources. C. make consumption expenditures and receive goods and services. D. buy resources and receive goods and services.