The vicious-circle-of-poverty hypothesis states that poor countries
A. cannot develop because people don't consume due to lack of goods and services.
B. are unable to save and invest enough to accumulate capital stock that would help them grow.
C. cannot develop because they lack the ability to educate their workers.
D. cannot develop because their economic policies are ineffective.
Answer: B
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The prices typically studied in microeconomics are
a. relative prices. b. absolute prices. c. money prices. d. retail prices.
At the current level of output, the marginal social cost of tennis balls is greater than the marginal social benefit. Then
A) more than the efficient quantity of tennis balls is being produced. B) there is excess demand for tennis balls. C) firms producing tennis balls must be earning negative profit. D) too few tennis balls are being produced.
Assume that there is a proposed tax cut by the U.S. House of Representatives. A problem is
a. how to distribute the benefits of the total tax cut among different groups within the country. b. that the process occurs very quickly without much time to study any negative effects. c. that tax cuts are harder to implement than tax increases. d. that the Federal Reserve has almost invariably been in favor of moderate tax increases rather than tax cuts. e. this statement is wrong, as tax bills originate in the U.S. Senate.
Many developing countries face a balance of payments constraint because:
A. they fail to implement exchange rate policy correctly. B. they hold too few international reserves. C. they hold too many international reserves. D. the IMF forces them to adopt policies that are counterproductive.