To encourage economic development a country should do all of the following EXCEPT
A. allow creative destruction to run its course.
B. limit the amount of imports allowed into the country.
C. establish a system of property rights.
D. invest in human capital.
Answer: B
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What are the two channels through which the world economy can affect U.S. aggregate demand? State what changes in the world economy can increase U.S. aggregate demand
What will be an ideal response?
Suppose the Asian financial crisis decreased U.S. exports. In the aggregate demand/aggregate supply model, this would be represented as
A) a shift to the right of aggregate supply, which would result in more production for the U.S. economy. B) a shift to the left of aggregate supply, which would result in less production for the U.S. economy. C) a shift to the right of aggregate demand, leading to more spending and production in the U.S. economy. D) a shift to the left of aggregate demand, leading to less spending and production in the U.S. economy.
Tariffs and quotas are essentially identical in their effects
Indicate whether the statement is true or false
If a firm buys a delivery van for $18,000 and can resell it in 2 years for $7,500, the opportunity cost of using the van is
A) $10,500. B) $7,500. C) $18,000. D) $3,750.