Describe China's reform path, including the forces that started China's reform efforts and how they continued through the 1980s and early 1990s
What will be an ideal response?
A long period of instability and disappointment with the economic results achieved under communism led to reform to create more wealth to distribute; it has been a gradual, steady dismantling of the controls exercised by the state and party over the economy. The first reforms were in agriculture, allowing more individual ownership and control over plots of land. Trade was gradually opened through special economic zones. Eventually other regions pushed for similar policies. China applied to join the WTO in 1986 and joined after a protracted period of negotiations which probably kept economic reforms moving forward.
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The profit-maximizing manager of Big Farms wants to purchase a large piece of farm equipment. The manager has two financing options from two different banks. Big Bank will allow the manager to make five equal payments of $22,000 at the end of each of the next five years. Best Bank will allow the manager to make a payment of $10,000 at the end of the next four years and then make a balloon payment
of $72,000 at the end of the fifth year. If the interest rate is 4 percent, which of the following statements is true? A) The manager of Big Farms should select Big Bank's offer because the total repayment is less than the total repayment at Best Bank. B) The manager of Big Farms should select Big Bank's offer as the present value of the payment plan is $97,939.60, which is lower than the payment plan offered by Best Bank. C) The manager of Big Farms should select Best Bank's offer as the present value of the payment plan is $95,477.75, which is lower than the payment plan offered by Big Bank. D) The present value of the two payment plans is exactly the same, so the manager of Big Farms is indifferent between the two payment plans.
The federal budget went $161 billion in fiscal year 2007 to $1 trillion in the next two to three years. What are the main factors that contributed to this increase?
Which of the following is an unintended consequence of welfare?
a. A low marginal tax rate on earned income for welfare recipients. b. A reduced incentive to leave welfare if more benefits are lost when income begins to be earned. c. A lower probability that children of families on welfare will themselves receive welfare. d. A welfare recipient becomes more productive, increasing the expected wage.
The purpose of antitrust policy is to:
A. promote competition among firms. B. increase profits to firms. C. protect domestic firms from foreign trade. D. achieve scale economies in production.