If the geography hypothesis holds, then:
A) poorer countries are permanently disadvantaged.
B) living standards in poorer countries can be substantially improved.
C) poorer countries are likely to catch up with richer countries very fast.
D) cultural beliefs can be considered to be an important source of economic prosperity.
A
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Excess reserves are equal to
A) the sum of desired reserves plus any reserves that are more than are required. B) actual reserves minus desired reserves. C) actual reserves plus desired reserves. D) desired reserves minus actual reserves.
Refer to Figure 5-11. S1 represents the supply curve that reflects the private cost of production and S2 represents the supply curve that reflects the social cost of production
One way to internalize the external cost generated by utilities is to impose a Pigovian tax on the production of electricity. What is the size of the Pigovian tax that will internalize the cost of the externality? A) P2-P0 B) P1-P0 C) P2-P1 D) P0
Drivers with auto insurance being more likely to act carelessly is an example of:
A. adverse selection. B. moral hazard. C. asymmetric selection. D. information optimization.
When the coupon rate on newly issued bonds decreases from 6% to 5%, the prices of existing bonds:
A. increase. B. remain unchanged. C. decrease only if the coupon rate is less than 5%. D. decrease.