How rapidly does the economy’s self-correcting mechanism work? Most economists agree that it
A. works quickly and reliably.
B. works slowly and not very reliably.
C. works reliably, but not very quickly.
D. does not work at all.
Answer: B
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Refer to Figure 22-4. Within a country, the impact of wars and revolutions and their subsequent destruction of capital is reflected in the per-worker production function in the figure above by a movement from
A) B to A. B) A to C. C) E to B. D) B to C.
When compared with China, the growth of clothing exports originating in Bangladesh is the result of
A) the comparative advantage that Bangladesh has in the production of clothing for export. B) the absolute advantage that China has in the production of clothing for export. C) the absolute advantage that Bangladesh has in the production of clothing for export. D) the comparative and absolute advantage that China has in the production of clothing for export. E) the comparative and absolute advantage that Bangladesh has in the production of clothing for export.
The primary difference between an import tariff and an import quota is that
a. tariffs cause prices to rise, but quotas do not b. quotas cause prices to rise, but tariffs do not c. tariffs result in a net welfare loss, but quotas do not d. quotas result in a net welfare loss, but tariffs do not e. tariff revenues go to government, but quotas benefit those with the right to sell foreign goods domestically
Even small differences in annual growth rates matter because ______.
a. considerable sums of money are involved b. they provide key indicators for the future c. governments use them to set tax rates d. differences are compounded over time