The normal rate of return is the
A) average rate of return earned in an industry at a given point in time.
B) opportunity cost of capital.
C) return on capital associated with zero accounting profits.
D) the amount paid to an investor when the firm is an on-going concern.
B
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Fiscal policy is defined as
A) the discretionary changing of government expenditures and/or taxes to achieve national economic goals. B) the design of a tax system to transfer income from the rich to the poor. C) the use of the taxing power of the government to redistribute wealth in a socially acceptable manner. D) the use of Congressional power to pursue social and political goals.
Self-interest makes cartels unstable for all of the following reasons except which one?
A) Each firm has an incentive to be the whistle-blower. B) Each firm has the incentive to produce more than the agreed upon quantity. C) Each firm has the incentive to lower their costs by producing less than the agreed upon quantity. D) Each firm has an incentive to be the first to report and confess cartel behavior.
Suppose a central bank tries to keep exchange rates fixed. When there is an increase in the demand for foreign goods, the central bank will most likely
A) buy foreign currency in exchange for the domestic currency. B) do nothing. C) sell the domestic currency in exchange for foreign reserves. D) use foreign reserves to buy the domestic currency.
What is export promotion? Give a few examples of countries that have tried it
What will be an ideal response?