Proponents of ISI assumed that governments
A) were capable of identifying and correcting market failures.
B) were capable of identifying and correcting the excesses of economic populists.
C) should enact orthodox stabilization plans.
D) could control the terms of trade.
E) Both A and D.
A
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Suppose that a sporting goods store had $800 of golf balls on its shelves at the beginning of 2016 and $1,300 at the end of 2016. The amount of inventory investment included in GDP would be
A) $500. B) $800. C) $1,300. D) $2,100.
According to the misperceptions theory, the amount by which producers increase their output when the general price level rises depends on
A) the slope of the aggregate demand curve. B) the slope of the long-run aggregate supply curve. C) the size of the Solow residual. D) how much they think their relative prices have increased.
When an Australian citizen enjoys military protection in Australia without contributing to the cost of Australia's defense budget, then
A) this citizen is a free rider. B) Australia is a free rider. C) this citizen receives no benefits if Australia is attacked. D) Australia's defense budget will run out of funds.
A monopolist is producing at an output level at which ATC = $5, P = $6, MC = $3, and MR = $4. We can conclude that
A) economic profit could be increased by producing more. B) economic profit could be increased by producing less. C) economic profit cannot be increased. D) the firm is earning $10 in economic profits.