If the institutions in an economy change from being extractive to inclusive, then in the economy:
A) geographical conditions will improve. B) returns to education will decrease.
C) returns to entrepreneurship will increase. D) geographical conditions will deteriorate.
C
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If Eddie can produce 40 milk shakes or 20 banana splits in an hour, and Tina can produce 30 milk shakes or 16 banana splits in an hour, then Eddie has a comparative advantage in producing banana splits
Indicate whether the statement is true or false
A trade deficit means:
A) the country has positive net savings, which it lends abroad. B) the country has negative net savings, which it lends abroad. C) the country has positive net savings, which it borrows from abroad. D) the country has negative net savings, which it borrows from abroad.
Interest rates are positive because
A) people prefer future consumption over current consumption. B) people prefer current consumption over future consumption. C) usury laws require rates to be very high. D) banks are not competitive.
When a producer has a comparative advantage in producing a good, it means the producer:
A. has the ability to produce the good at a lower opportunity cost than others. B. is efficient in production. C. has no reason to trade with others. D. can produce more of that good than others with the same number of workers.