According to Lewis’s model the dual economy grows only when ?

Related Mcqs:

1. If two countries start with the same real GDP/person and one country grows at 2 percent while the other grows at 4 percent ?

   A. one country will always have 2 percent more real GDP/person than the other
   B. the standard of living in the country growing at 4 percent will start to accelerate away from the slower growing country due to compound growth
   C. the standard of living in the two countries will converge
   D. Next year the country growing at 4 percent will have twice the GDP/person as the country growing at 2 percent

2. Suppose the economy is initially in long run equilibrium Then suppose there is a drought that destroys much of the wheat crop if policymakers allow the economy to adjust to long-run equilibrium on its own, according to the model to aggregate demand and aggregate supply what happens to prices and output in the long run ?

   A. Output rises; prices are unchanged from the initial value
   B. Output and the price level are unchanged from their initial values
   C. Output falls; prices are unchanged from the initial value
   D. Prices fall; output is unchanged from its initial value

3. A dual economy is distinguished from other economies by having ?

   A. an industrial sector and a manufacturing sector
   B. a traditional agricultural sector and a modern industrial sector
   C. state owner ship of the means of production
   D. an industrial sector that concentrates on manufacturing and construction

4. The simplest explanation based on Lewis’s model for rural-urban migration is ?

   A. That people migrate when urban wages exceed rural wages
   B. a higher expected income in urban areas
   C. better infrastructure in urban areas
   D. the availability of labor-intensive jobs in urban areas

5. As an economy grows ?

   A. The government’s budget position should automatically improve
   B. The government’s budget position should automatically worsen
   C. This will have no effect on the government’s budget position
   D. This will reduce the government’s tax revenue

6. If the economy grows the government’s budget position will automatically ?

   A. worsen
   B. Improve
   C. Stay the same
   D. Increase with inflation

7. The hypothesis that people know the true model of the economy and that they use this model to form their expectations of the future is the ?

   A. Rational-expectations hypothesis
   B. Passive-expectations hypothesis
   C. adaptive expectations hypothesis
   D. lagged-expectations hypothesis.

8. Suppose the economy is initially in long-run equilibrium Then suppose there is an increase in military spending due to rising international tensions According to the model of aggregate demand and aggregate supply what happens to prices and output in the long run ?

   A. Output falls; prices are unchanged from the initial value
   B. Price fall; output is unchanged from its initial value
   C. Output and the price level are unchanged from their initial values
   D. Prices rise; output is unchanged from its initial value

9. Suppose the economy is initially in long-run equilibrium Then suppose there is an increase in military spending due to rising international tensions According to the model of aggregate demand and aggregate supply what happens to prices and output in the short run ?

   A. Price fall; output rises
   B. Price fall; output falls
   C. Price rise; output fall
   D. Price rise; output rise

10. Suppose the economy is initially is long run equilibrium Then suppose there is a drought that destroys much of the wheat crop According to the model of aggregate demand and aggregate supply, what happens of prices and output in the short run ?

    A. Price rise; output falls
    B. Price fall; output rises
    C. Price rise; output rises
    D. Price fall; output falls