Economic development in DVC often focuses on capital accumulation. Why?
What will be an ideal response?
First, the availability of capital goods affects labor productivity, which affects real incomes and the per capital standard of living. Most DVC are deficient in the tools, equipment, machinery, and factories that would make the workers more productive. Second, the natural resource base is often limited in DVC, which means that other resources such as capital goods will be needed to substitute as an avenue for economic growth. Third, there may be cumulative effects from capital accumulation because if capital accumulation increases output faster than the population grows, the savings generated from rising real incomes can be reinvested to generate more capital formation and more savings.
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A trade surplus occurs when a country's exports exceed that country's imports
Indicate whether the statement is true or false
If a marginal cost pricing rule is imposed on the natural monopoly in the figure above, then the consumer surplus will be
A) $0. B) $8 million. C) $16 million. D) $32 million.
Expressing the U.S. federal budget deficit as a percentage of Gross Domestic Product (GDP)
A. is only useful if the budget deficit is rising at an annual rate of more than 4 percent. B. helps us understand the size of the deficit relative to the size of the economy. C. was useful through the 1980s, but is no longer helpful because both the deficit and real Gross Domestic Product (GDP) have grown so large. D. results in inflation-adjusted revenue and expenditure numbers.
If a landlord can get everyone out of the apartment building and refurbish it, they
A. can charge whatever rent they want and increase it whenever they want. B. can only charge a refurbishing fee that is also controlled. C. can charge whatever rent they want, but it then becomes controlled at a higher rent. D. must still only charge the rent that they were charging before the repairs.