Which of the following is not a key idea in the economic way of? thinking
A. People make rational choices by comparing costs and benefits.
B. Poor people are discriminated against and should be treated more fairly.
C. A rational choice is made at the margin.
D. Choices respond to incentives.
B. Poor people are discriminated against and should be treated more fairly.
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A. Everything else remaining unchanged, what is likely to happen to the credit demand curve of an economy if:
i. businesses in the economy see scope for growth and are planning to expand production in the future? ii. households are pessimistic about future incomes? iii. the government is planning to borrow money from financial institutions for investment in infrastructures? b. Everything else remaining unchanged, what is likely to happen to the credit supply curve of an economy if firms tend to hold on to retained earnings instead of paying dividends?
The claim that inflation is necessary for development is based on the idea that
a. rapidly rising demand is necessary to spur productive activity b. the problems brought on by inflation will attract foreign aid c. the process of structural change naturally forces prices up in some sectors, while other sectors'prices do not fall d. higher prices will force people to work harder e. none of the above
Another commonly used algebraic form for a demand function is the semi-logarithmic functional form, ln(Q) = a - bP + cI, where Q is quantity demanded, P is the product price, and I is income
Here, 100 c represents the percentage change in quantity demanded given a one unit increase in income. For a normal good, we should expect the value of c to be: A) positive. B) negative. C) positive or negative. D) We do not have enough information to answer this question.
Market failure means that
A) the strike organized by unionized employees fails to achieve its goal. B) too many outdated products are offered for sale in the local supermarket. C) there is overallocation or underallocation of resources to certain economic activity. D) an unexpectedly harsh winter shuts down a factory.