Foreign aid:
A. provided by developed countries to developing countries represents about 10 percent of the GDP of developed countries.
B. is an important source of funding for investment in most developing countries.
C. does not contribute much to domestic investment in most developing countries.
D. is largely wasted in most developing countries because it comes with no strings attached.
Answer: C
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According to the quantity theory of money, money growth and inflation are
A) positively correlated. B) negatively correlated. C) independent, that is, not correlated. D) positively correlated if the inflation rate is positive and negatively correlated if the inflation rate is negative.
If a firm bakes cookies and sells them for $1,000 while spending $100 on sugar, $150 on chocolate, $50 on other supplies, $300 on wages and $400 on rent, what is its value added?
a. $300 b. $0 c. $700 d. $200 e. $400
A positive temporary supply side shock will:
A. increase the level of potential output in the long run. B. decrease the price level in the long run. C. increase the price level in the long run. D. have no effect in the long run.
To correct for the underproduction of products with positive externalities, the government must
A. increase taxes on the industry. B. provide tougher regulations on the industry. C. fine the industry. D. provide the incentives for the private sector to produce and consume the good.