In the early 2000s, some argued that the Indian government impeded foreign investment with tariffs, investment caps, and tons of red tape. In terms of promoting or retarding economic growth, such policies:
A. increase growth because they keep people producing for the local market.
B. decrease growth because they slow the growth of capital.
C. increase growth because they stop exploitation by foreigners.
D. decrease growth because they cause inflation.
Answer: B
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Refer to Figure 18-4. Rank the above panels in terms of most unequal income distribution to least unequal income distribution
A) Panel C, Panel B, Panel A B) Panel B, Panel C, Panel A C) Panel A, Panel B, Panel C D) Panel A, Panel C, Panel B
If a firm in a perfectly competitive industry is producing at a point where TR equals TC and the market demand increases, then the firm will be making
a. economic profits; it will expand output. b. economic profits; output will not change. c. normal profits; output will expand. d. normal profits; output will not change.
Advertising by the monopolist
A. is not done because the monopolist has the only supply of the product and doesn’t need to advertise. B. would have the effect of shifting its demand curve to the left. C. may lead to expanded production by the monopolist. D. makes no sense because there are no substitute commodities available to consumers.
Exhibit 5-5 Gross domestic product data National income accountBillions ofdollars Depreciation$ 500 Net interest 2,000 Compensation of employees 6,000 Profits 1,500 Rental income 200 Indirect business taxes 800 Net exports 1,000 As shown in Exhibit 5-5, using the income approach, gross domestic product (GDP) is:
A. $8,000 billion. B. $8,800 billion. C. $9,400 billion. D. $11,000 billion.