Which of the following is the best example of a capital good?
a. swimming pool
b. vacation
c. factory
d. motorcycle
c. factory
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Suppose good X is on the horizontal axis, good Y is on the vertical axis, and the slope of an individual's budget line is -2. Which of the following is true??
a. Good Y is twice as expensive as good X b. ?The consumer gives up two units of good Y for each unit of good X she purchases. c. ?The opportunity cost of good X is one half of a unit of good Y. d. ?All of the above are correct.
________ policies refer to government programs designed to exploit natural comparative advantage by increasing production of a few export goods most closely related to a country's resource base
A) Comparative advantage B) Primary-export-led development C) Import-substitution development D) Inward-looking development
An increase in the money supply will affect aggregate demand
A) only if the increase in the money supply causes interest rates to rise. B) only if the increase in the money supply causes people to buy less goods and services. C) only if the increase in the money supply causes people to increase their saving. D) if the increase in the money supply causes interest rates to fall and/or causes people to buy more goods and services.
The catch-up effect says that countries with low income can grow faster than countries with higher income. However, in statistical studies that include many diverse countries we do not observe the catch-up-effect unless we control for other variables
that affect productivity. Considering the determinants of productivity, list and explain some things that would tend to prohibit or limit a poor country's ability to catch up with the rich ones.