A. growing government assistance create addiction to welfare programs
B. low income levels create pressure for money creation
C. low income levels create pressure for cheap imports
D. low per capita incomes creates low savings that keep incomes low
Related Mcqs:
- According to the supply side of the vicious circle theory of development a country is poor because ?
A. technology levels do not allow for self sufficiency
B. it was previously too poor to save and invest
C. underemployment is too widespread
D. resource allocation is poor - The Vicious circle theory indicates that ?
A. a country is poor because it has lower productivity but high savings
B. as countries grow richer they save less
C. poverty perpetuates itself in mutually reinforcing circles on supply and demand sides
D. market size is large in LDCs - Keynesian economics is an economic theory of British economist John Maynard. What this theory states ?
A. A free market is necessary for economic growth and stability
B. Regulation is necessary for economic growth and stability
C. Active government intervention is necessary to ensure economic growth and stability
D. Government intervention is not necessary to ensure economic growth and stability - Suppose that tomatoes from Mexico face a 20 percent tariff in the United States and a 25 percent tariff in Canada. If the United States and Canada maintain free trade between each other, the these two countries belong to a ?
A. free-trade area
B. customs union
C. common market
D. monetary union - The theory that states that a country has a comparative advantage in the production of a product if that country is relatively well endowed with inputs used intensively in the production of that product is the?
A. Ricardo Malthus theorem
B. Heckscher Ohlin theorem
C. Lucas-Laffer theorem
D. Friedman Samuelson theorem - Assume that the United States faces a percent inflation rate while no (zero) inflation exists in Japan. According to the purchasing power parity theory over the long run the dollar would be expected to ?
A. appreciate by 8 percent against the yen
B. depreciate by 8 percent against the yen
C. remain at its existing exchange rate
None of the above - Macroeconomic theory that emphasized the theories of Keynes and de-emphasized the classical theory developed as the result of the failure of ?
A. economic theory to explain the simultaneous increases in inflation and unemployment during the 1970s
B. The classical model to explain the prolonged existence of high unemployment during the Great Depression
C. fine tuning during the 1960s
D. the economy to grow at a rapid rate during the 1950s - One criticism of Rostow’s theory of economic growth is that ?
A. much available data contradicts his thesis about the takeoff stage
B. there is no explanation of why growth occurs after takeoff
C. his hypothesis of the stages of growth is difficult to test empirically
D. All of the above are correct - A theory ?
I- is a systematic explanation of relationships between economic variables
II- explains causal relationships among variables
III- provides a basis for policy
IV- provides an explanation of all factors influencing economic growth.A. I only
B. I and II only
C. I , II and III only
D. IV only - Concerning tariff policy, the United States does not charge?
A. lower tariff rates on goods from nations with normal trade relation status
B. lower tariff rates on goods from nations with most favored nation status
C. low or zero tariffs on goods from certain developing countries
D. identical tariff rates in products from all countries of the world
