The achievement of full employment is a sufficient condition for the achievement of economic growth. Evaluate.
What will be an ideal response?
Full employment is not a sufficient condition for economic growth. Underdeveloped, no-growth economies may have full employment in the sense that everyone is working at providing a subsistence level of living, but this does not lead to economic growth. Also important here is the allocative factor. Not only is full employment of resources required, but resources must also be employed efficiently so they produce maximum levels of goods and services.
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If the marginal cost of producing vanity license plates is virtually zero (by prison inmates with little else to do), then states would maximize their profits on plate sales at the point on a linear demand curve where
A. demand is inelastic. B. demand is elastic. C. demand is unit elastic. D. the demand curve crosses the horizontal axis.
Which of the following statements about mutual funds is correct?
a. A mutual fund is not a financial intermediary. b. A disadvantage of buying mutual funds is a lack of diversification c. People who buy shares from a mutual fund are guaranteed a minimum return. d. On average index funds outperform managed funds.
If a government increases its budget deficit, then domestic interest rates
a. and net exports rise. b. rise and net exports fall. c. fall and net exports rise. d. and net exports fall.
Suppose both a monopolist and a perfectly competitive firm charge a price corresponding to the quantity at the intersection of the marginal cost and marginal revenue curves. If this price is between each firm's average variable cost and average total cost curves,
A. the perfectly competitive firm will continue to operate in the short run but the monopolist will shut down. B. both firms will continue to operate in the short run. C. both firms will shut down in the short run. D. the perfectly competitive firm will continue to operate in spite of the loss but the monopolist will earn a profit.