The economic decisions of central planners often are wrong because they have little understanding of
a. local economic conditions
b. bureaucracies
c. Karl Marx's theories
d. democracy
Answer: a. local economic conditions
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A package of nontraded financial instruments can be transformed into a traded financial instrument through the process of
A) collateralization. B) repurchasing. C) securitization. D) underwriting.
If a bushel of corn sells for $2 in the United States and for 4,000 COP (Colombian peso) in Colombia, and if 1 dollar is worth 2,200 COP, then:
a. the corn is 400 COP more expensive in Colombia. b. the corn is 400 COP cheaper in Colombia. c. the price of a bushel of corn equals $2 in both the United States and Colombia. d. the price of corn is 4,000 COP lower in Colombia than in the United States. e. the price of corn is $0.20 lower in the United States than in Colombia.
It has become largely accepted since the end of the Bretton Woods agreement that: a. the gold standard was superior to anything that has come along since
b. governments have no role whatsoever in determining exchange rates. c. it is not necessary for governments to fix exchange rates for long periods of time. d. floating rates simply have not worked.
If nominal wage rates increase by 2 percent per year and the price level increases by 5 percent per year, real wages will _____
Fill in the blank(s) with the appropriate word(s).