In 1991, El Salvador ended a fifteen-year civil war, and the new government in place introduced a number of liberalization policies that included privatization, exchange rate liberalization, tariff reductions, tax exemptions to foreign direct investment, and a more market-oriented economy. These economic reforms are examples of:
A. a fiscal and monetary policy change.
B. both a policy change and a regime change.
C. a policy change.
D. a regime change.
Answer: D
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In the classical model the interest rate is determined by
a. real investment demand. b. real saving. c. government spending. d. tax revenues. e. all of the above.
If Best Lights, Lights R Us, and Bright Lights are all competing in the light bulb market and Best Lights consistently is the first to change prices, Best Lights might be ________.
A) offering to be the price leader B) signaling to the other firms to consistently lower their prices C) signaling to the other firms to consistently raise their prices D) signaling to the other firms to consistently maintain their prices
One way that insurance companies deal with imperfect information is to classify people into ______________ and charge lower premiums to those in the lowest category.
a. income groups b. risk groups c. economic sets d. moral hazard sets
Of the emerging changes in the field of international relations, which is the most far-reaching and critical one?
a. increasing gaps in wealth b. erosion of American power c. role of the sovereign state d. spread of democracy