Which of the following is a weakness in trying to get the wealthy to bear more of the burden of increasing growth in a less developed country?
a. The wealthy do not have significant political power.
b. The wealthy can move their savings to other countries.
c. The wealthy do not have much money to tax.
d. The wealthy have large homes in their country and so are less likely to leave.
e. The wealthy have powerful businesses that they are unable to relocate.
B
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If the quantity of money demanded is less than the quantity of money supplied, then the
A) interest rate will decrease. B) interest rate stays the same. C) interest rate will increase. D) effect on the interest rate is indeterminate.
Over a particular price range, if the quantity effect of a price decrease is smaller than the price effect, it implies that:
A) demand is elastic in the price range. B) demand is inelastic in the price range. C) the demand curve is horizontal in the price range. D) the demand curve is upward sloping in the price range.
If the average productivity of Indian firms is rising more quickly than the average productivity of American firms, which of the following would you expect to see? (India's currency is the rupee.)
A) an increase in the prices of Indian products B) a decrease in the value of the rupee relative to the dollar C) an increase in the quantity demanded of Indian products relative to American products D) All of the above are correct.
Why was the stock market crash of 1929 a disaster for the economy?
(a) Through the "wealth effect," investors lost paper wealth and consequently reduced their spending on goods and services. This led to cutbacks in production and jobs. (b) Businessmen became pessimistic about the future and reduced spending on plants and equipment, thus causing reduced production and increased layoffs in the capital-goods sector of the economy. (c) The crash revealed a flawed structure of credit and weak system of banks and other financial institutions in the U.S. (d) All of the above are correct