Would a new growth theorist expect economic growth to be very rapid in one of the Communist nations before the fall of Communism? Why or why not?
What will be an ideal response?
No. These centrally planned economies did not provide for private property rights, which reduces the incentives people have to use the assets efficiently. Further, the lack of property rights reduces the incentive to engage in research activity. Finally, these economies tended to be more closed, and there is a negative relationship between protectionism and economic growth. Free trade encourages a more rapid spread of new technology and ideas.
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Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the short run would be:
A. P3 and Y1. B. P2 and Y1. C. P2 and Y3. D. P1 and Y2.
Which of the following is an example of a stock rather than a flow?
A. Ana collects $5,000 per month rent on her property that she leases. B. Brant mows 25 lawns per week. C. Connie earns $75,000 per year. D. Derek has $2,568 in his checking account.
The most important source of financial capital for firms today is
A. sale of bonds. B. reinvestment of profits. C. sale of new issues of stock. D. trade of previously issued stock.
Congratulations!You have just won a $1,000,000 (delayed) prize in the lottery. Your state offers you the following alternatives:you can take $750,000 now, or 10 years from now you can receive the full $1,000,000
The delay isn't a problem, because you weren't planning to use any of the prize money for at least 10 years. If you take the lump sum now, you figure you can invest it at an annually compounded rate of 3 percent. Should you take the $750,000 now, or wait to get the full $1,000,000 in 10 years?Why or why not?Show any calculations.