What is creative destruction? Define political creative destruction
What will be an ideal response?
Creative destruction refers to the process in which new technologies replace old ones, new businesses replace existing businesses, and new skills make old skills irrelevant. The process of creative destruction implies that technological change is the main driver for economic growth but also creates losers as it replaces otherwise profitable firms or technologies with newer ones.
Political creative destruction refers to the process in which economic growth destabalizes existing regimes and reduces the political power of rulers and monarchs.
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Cash and similar assets held to meet depositor withdrawals or payments are called:
A. bank reserves. B. money. C. deposits. D. checking accounts.
Most economists are in agreement that minimum wages cause unemployment and make some people worse off as a result. However, does that imply that it makes everyone worse off? Who might benefit?
What will be an ideal response?
Suppose the IRS were to introduce a tax exemption for portion of interest income earned on corporate bonds. This would
A) reduce the user cost of capital. B) raise the marginal product capital. C) raise the rate of depreciation. D) All of the above are correct.
What happens to the market outcome if cartel members cheat on the collusive agreement?
A) Price declines, but firm-level quantities remain the same because the firms act like price takers B) Price and quantity revert to the single-seller monopoly equilibrium outcome C) Other firms raise prices so that the average market price remains unchanged D) Price declines and quantity increases toward the perfectly competitive equilibrium