Some economists argue that well-functioning capital markets that allow funds to move from those who have but do not need funds to those who need but do not have funds, are essential for rapid economic growth. Well-functioning capital markets are an example of:
A. entrepreneurship.
B. growth-compatible institutions.
C. physical capital.
D. human capital.
Answer: B
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The steeper the Security Market Line:
A. the lower the risk premium. B. the more investors dislike risk. C. the less investors are concerned about risk. D. the greater the risk-free interest rate.
Figure 4.5 shows the supply curves of a non-durable good. A shift from the supply curve S to S' could be caused by:
a. a patent application that restricts the use of a particular production technology. b. a decrease in consumer income. c. an expectation of a higher product price in the future among suppliers. d. an increase in the current price of the product. e. several competing producers going out of business.
How does a tariff affect the domestic price of the import, the domestic consumption, the domestic production, and the quantity imported?
What will be an ideal response?
Relate the declaration of war by the United States against terrorism to the production possibilities curve.
What will be an ideal response?