An economy is not able to develop because of a lack of capital. Which of the following strategies would you suggest this economy pursue?
A. nationalize private enterprises because the government sector is not motivated by profit maximization
B. lower interest rates
C. impose quotas on how much capital can be imported from other countries to reduce dependency on foreign capital
D. increase the political stability of the economy
Answer: D
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If a shortage of a good exists in the market,
a. the price is higher than its equilibrium level b. the quantity demanded is less than the quantity supplied c. the quantity demanded exceeds the quantity supplied d. there is an excess supply of the good e. the price will fall
What will happen in the market for shotgun-shell ammunition now if buyers expect higher shotgun-shell prices in the near future?
a. The demand for shotgun-shell ammunition will increase. b. The demand for shotgun-shell ammunition will decrease. c. The demand for shotgun-shell ammunition will be unaffected. d. The supply of shotgun-shell ammunition will increase.
If a government managed to reduce the time inconsistency problem by mandating that the central bank target inflation at a low rate, then
a. the long-run Phillips curve would shift right. b. the long-run Phillips curve would shift left. c. the short-run Phillips curve would shift up. d. the short-run Phillips curve would shift down.
What is the percentage of income received by the upper quintile on line Y?
