Political instability is an impediment to development mainly because it:
A. undermines both domestic and foreign investment in a developing country.
B. creates cultural and social differences among groups in developing countries.
C. produces excessive levels of domestic saving.
D. redistributes income.
Answer: A
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If the nominal interest rate is less than the equilibrium nominal interest rate determined in the money market, then in the short run households and firms
A) buy financial assets. B) sell financial assets. C) increase real GDP. D) lower the price level. E) raise the price level.
Suppose an economy has no income taxes or imports. If the MPC is 0.75, what does the expenditure multiplier equal?
What will be an ideal response?
The fraudulent delivery of low quality experience goods at high prices is more likely if
a. interest rates decline b. information about notorious firms is speedily disseminated c. price premiums for allegedly high quality increase d. sellers invest in non-transferable reputation e. none of the above
Which of the following factors that affect our well-being does GDP fail to adequately account for?
a. changes in the quality of goods b. externalities c. leisure d. all of the above