To use an analogy that helps explain the ABCs of economic development: To build a skyscraper, you must first build the foundation. In order for an economy to create economic development, it must first develop an infrastructure. The infrastructure investment refers to
a. networks of factories
b. a high birth rate
c. markets
d. roads, schools, telecommunications systems, hospitals
e. an access to foreign investment
D
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Suppose a sole proprietorship is earning total revenues of $100,000 and is incurring explicit costs of $75,000. If the owner could work for another company for $30,000 a year, we would conclude that:
A) the firm is incurring an economic loss. B) implicit costs are $25,000. C) the total economic costs are $100,000. D) the individual is earning an economic profit of $25,000.
Banks prefer __________ hold excess reserves because __________
A) not to; excess reserves earn no interest B) not to; banks are not required to hold them C) to; excess reserves earn interest D) to; banks need them to prevent runs
Refer to the table below. Because the extent of variation in the price of the input is ________ in Country B compared to Country A, it is less risky to plan to purchase the input in Country ________.
The above table provides the probability distribution of price of an input next year in Country A and Country B.
A) lower; A
B) greater; A
C) greater; B
D) lower; B
If, as a result of market forces, the exchange rate changes from $1 equals 11 pesos to $1 equals 9 pesos, then the dollar has
A) appreciated. B) been revalued. C) been devalued. D) depreciated. E) There is not enough information to answer the question.