"China is not a typical developing nation." Which of the following economic features is most likely to justify this claim?
A. The government of China spends a significant portion of its revenue on national defense.
B. China has a large trade deficit with the United States.
C. The Chinese government favors a freely floating exchange-rate policy.
D. China has a high national saving rate.
Answer: D
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Financial capital
A) depends on saving and borrowing decisions. B) is accumulated investment. C) depreciates each year. D) is another name for the machines and tools that businesses buy. E) is independent of physical capital.
In 1920 a constitutional amendment was passed that outlawed the production, sale, purchase, and consumption of alcoholic beverages. "Prohibition" encouraged bootlegging and black markets for whiskey, wine, and beer
The amendment was eventually repealed in 1933. In 1920, what alternative economic policy was available to the government as a means of reducing alcohol consumption nationwide?
The hidden-cost fallacy occurs when
a. A firm considers irrelevant costs b. A firm ignores relevant costs c. A firm considers overhead or depreciation costs to make short-run decisions d. Both a and c
Suppose the equilibrium level of income exceeds the full employment level of income and there is high inflation. Hence, the government decides to implement a fiscal policy that will act to reduce national output and prices. This can be accomplished by:
a. increasing government spending such that aggregate expenditures are increased. b. raising taxes and government spending by the same amount such that aggregate supply is decreased and aggregate demand is increased. c. decreasing government spending such that aggregate demand is reduced. d. lowering average tax rates such that aggregate supply is increased. e. increasing transfer payments such that aggregate expenditures decline.