Political instability is an impediment to development mainly because it:
A. undermines both domestic and foreign investment in a developing country.
B. creates cultural and social differences among groups in developing countries.
C. produces excessive levels of domestic saving.
D. redistributes income.
Answer: A
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Max Shreck, an accountant, quit his $80,000-a-year job and bought an existing tattoo parlor from its previous owner, Sylvia Sidney. The lease has five years remaining and requires a monthly payment of $4,000
Max's explicit cost amounts to $3,000 per month more than his revenue. Should Max continue operating his business? A) If Max's marginal revenue is greater than or equal to his marginal cost, then he should stay in business. B) Max should continue to run the tattoo parlor until his lease runs out. C) Max's explicit cost exceeds his total revenue. He should shut down his tattoo parlor. D) This cannot be determined without information on his revenue.
In the short run, who tends to benefit from a decrease in the exchange rate?
A) domestic producers B) owners of domestic-currency assets C) domestic consumers D) foreign producers
Which of the following would shift the saving schedule upward?
A. Consumer expectations of rising prices of products. B. Increased optimism about future incomes. C. A decrease in real interest rates. D. A decrease in wealth.
When a tax on emissions into the air accurately reflects the cost to all members of society of an additional unit of the emissions, it
A) amounts to no more than a license to pollute. B) encourages firms to reduce emissions as long as the cost of doing so is less than the cost of continuing the emissions. C) gives firms little incentive to search for less-polluting production processes. D) will not prevent large and profitable firms from polluting.