What conditions might be required for an import-substitution policy to be effective? What advantages might it bring?
What will be an ideal response?
Historically, IS was enforced when developing countries were shut out of world markets. For IS to be effective today would require a consistent set of policies and a willingness to abandon protection when an industry either matured or showed that it could not. If this were possible it could contribute to an economy's ability to learn, adapt, and advance with less reliance on outside help.
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If the Fed promises to conduct a(n) ________ for several years, inflation expectation will be ________
A) contractionary fiscal policy; high B) expansionary monetary policy; high C) contractionary monetary policy; high D) expansionary fiscal policy; low
While price discrimination is possible between two markets, it is not possible in more than two
Indicate whether the statement is true or false
Answer the following statements true (T) or false (F)
1) If a firm purchases an input that is jointly produced with another good, changes in the demand for the other good will have no effect on the price of the input. 2) It is profit-maximizing for managers to locate their stores close together in areas that are frequented by low-income consumers. 3) Stores that are located in areas that offer a low transaction cost to consumers are more likely to be able to charge higher prices than stored located in areas with high transaction costs. 4) To maximize profit, a manager of a large chain of stores that are located throughout the United States needs to determine the average value of their consumers' time and transportation costs and locate each store in areas based on the average value. 5) A consumer's total transportation costs do not include the time the consumer spends in the store.
Liquidity is:
A. a measure of how easily a particular asset can be converted quickly to cash without much loss of value. B. the speed with which dollars are spent in the economy. C. the speed with which physical dollars change hands in the economy. D. the magnitude of change in the money supply as controlled by the Fed.