If a country’s productivity doubles for everything it produces, this will not alter its prior pattern of specialization because it has not altered its comparative advantage.
Answer the following statement true (T) or false (F)
True
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Government transfer payments include which of the following?
A) grants to state and local governments B) interest on the national debt C) Social Security and Medicare programs D) national defense
It is generally claimed that state trading, or centrally controlled trading will tend to reach a lower economic welfare than would be reached by allowing market forces to determine trade flow directions and terms of trade
Illustrate a counter-example to this proposition.
All of the following accurately describe microlending EXCEPT:
A) it involves small loans B) lending is primarily undertaken by the government C) the borrowers are people who are attempting to start or expand a small business D) many economists think it has aided economic growth in many low-income countries
A market economy depends on market mechanisms to: a. determine the most efficient way of using resources
b. determine how large the government's budget deficit should be. c. decide how much government regulation there should be. d. provide everyone with a minimum level of income.