Briefly discuss new growth theory
What will be an ideal response?
New growth theory focuses on the determinants of technological progress and on the extent to which increasing returns to scale might exist.
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Which of the following is true?
a. In a competitive capital market, private investors have a strong incentive to evaluate projects carefully and allocate their funds toward those projects expected to yield the highest rates of return. b. In a competitive environment, profitable investment projects will tend to increase the wealth of the nation. c. When investment funds are allocated by governments (rather than capital markets), political clout rather than the expected rate of return will generally determine which projects are undertaken. d. All of the above are correct.
Pure capitalism does not focus on private ownership of resources
Indicate whether the statement is true or false
Capital flows freely between two countries and the countries have fixed exchange rates. The treasury bonds of each country have similar maturities but different expected returns. What can you deduce from this information?
What will be an ideal response?
The economy of Atlantis produces just ten goods and services; if it were a money economy there would be _____ prices; if it were a barter economy there would be _____ prices.
A. less than 10; 10 B. 10; 10 C. 10; less than 10 D. 10; more than 10