Is the developing world moving toward centralized planning or free markets? Justify your answer
What will be an ideal response?
In recent years the developing world has been moving more toward free markets. The failure of central planning in many developing countries led these countries to abandon planning efforts. Central planning is being replaced with market-oriented reforms such as privatization of state-run enterprises and the elimination of price controls.
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
Which is an illustration of a macroeconomic question?
a. Should the minimum wage be increased for low-income workers? b. What is the least costly way to produce automobiles and trucks in the United States? c. Are increasing wage demands by workers contributing to price inflation? d. Will the introduction of a new computer chip change the demand for computers?
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y2. C. P3 and Y1. D. P2 and Y3.
The demand for cars in a certain country is given by: D = 20,000 - P, where P is the price of a car. Supply by domestic car producers is: S = 5,000 + 0.5. If this economy is open to trade, and the world price of a car is $6,000, and the government imposes a quota allowing 3,000 cars to be imported, then domestic price of the car will be ________.
A. $8,000 B. $6,000 C. $5,000 D. $10,000