Describe ways that governments can promote faster economic growth
What will be an ideal response?
Policies for increasing the economic growth rate are 1 ) Stimulate saving (for instance, tax incentives could be directed at increasing saving which will then increase the capital stock); 2 ) Stimulate research and development (inventions can be copied, so government subsidies can lead to more inventions that spread throughout the economy); 3 ) Encourage international trade (free international trade encourages economic growth because free trade extracts all the possible gains from specialization and exchange); 4 ) Improve the quality of education (education creates benefits beyond the ones enjoyed by the students who receive education).
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Using the information in the table above, calculate the number of people in the labor force
A) 2500 B) 2100 C) 1500 D) 800
A sustained change in the monetary growth rate will
A) immediately affect equilibrium real money balances by raising the money interest rate. B) eventually affect equilibrium nominal money balances by raising the money interest rate. C) eventually affect equilibrium real money balances by reducing the money interest rate. D) eventually affect equilibrium real money balances by raising the real interest rate. E) eventually affect equilibrium real money balances by raising the money interest rate.
In the Malthusian model, state-mandated population control policies are likely to
A) decrease the equilibrium size of the population and increase the equilibrium level of consumption per worker. B) decrease the equilibrium size of the population and have no effect on the equilibrium level of consumption per worker. C) have no effect on the equilibrium size of the population and increase the equilibrium level of consumption per worker. D) have no effect on either the equilibrium size of the population or the equilibrium level of consumption per worker.
Which of the following is a possible market solution to the lemons problem?
A. Producers might be required to meet certain legal standards to obtain licenses granting the right to sell their products. B. Government agencies might be charged with directly overseeing production and distribution of certain products. C. Liability laws might be established to ensure that firms selling certain products must face penalties in the event the products function poorly. D. Producers might offer product guarantees and warranties.