The shortage created by a price ceiling will likely be
A) smaller if the good is a necessity.
B) larger if the good is addictive.
C) smaller if the good is a luxury.
D) unaffected by the time that has elapsed since the price ceiling is implemented.
E) None of the above answers is correct.
A
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If a country lacks ________, economic growth ________
A) a democratic form of government; cannot occur B) a proper incentive system; cannot occur C) pure capitalism; will be slower compared to other countries D) a proper incentive system; will occur at a pace suggested by the new growth theory E) economic freedom; will increase at a faster pace
If the price of grapefruit rises, the substitution effect due to the price change will cause
A) a decrease in the demand for oranges, a substitute for grapefruit. B) a decrease in the quantity of grapefruit demanded. C) a decrease in the quantity of grapefruit supplied. D) a decrease in the demand for grapefruit.
The conventional view among economists is that persistent budget deficits lead to ________ real interest rates and ________ private investment
A) higher; crowd in B) higher; crowd out C) lower; crowd in D) lower; crowd out
Which of the following is not considered a factor that contributes to economic growth?
a. increased labor productivity b. increased infant mortality rates c. technological advances d. the migration of resources from areas of low productivity to areas of high productivity