The per capita incomes of countries in the quartile with the most economic freedom during 1980-2010 were
a. slightly lower than those of the quartile of countries with the least economic freedom.
b. about the same as the quartile of countries with the least economic freedom.
c. about twice those of the countries with the least economic freedom.
d. about eight times those of the quartile of countries with the least economic freedom.
D
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If the marginal propensity to consume is 0.75, the marginal propensity to save is
A) 0.25. B) 0.5. C) 1. D) 3.
Assume an industry initially in equilibrium has a price floor imposed at a price above the equilibrium price. Total revenue received by the producers from sales will: a. rise as a result
b. rise as a result only if supply is elastic. c. rise as a result only if demand is elastic. d. rise as a result only if demand is inelastic.
In many less-developed countries, per capita GDP falls even though real GDP rises, because:
a. output grows at a slower rate than the population. b. the GDP measures in developing countries are always inaccurate. c. consumption spending exceeds investment spending. d. these countries face an acute trade deficit. e. prices increase faster than an increase in actual output level.
Deviations from purchasing power parity will be increasingly higher as international trade tariffs become more restrictive. The main reason for this phenomenon is that:
a. arbitrage activities become less profitable. b. governments prefer purchasing power parity not to hold. c. the interest rate parity fails to hold. d. goods become more differentiated across countries. e. individuals develop hatred toward closed economies.