Total factor productivity is
a. changes in amounts of factors of production
b. changes in output due to changes in the amount of factors of production
c. changes in output due to changes in productivity of factors of production
d. changes in productivity of factors of production due to changes in other factors
e. none of the above
Question 2 - What is shared growth, and what kind of institutions are required for its success?
What will be an ideal response?
Question 3 - In the two-gap model, which of the following gaps, when binding, leads to foreign aid having the largest impact on GNP?
(a) Fiscal gap.
(b) Savings gap.
(c) Foreign exchange gap.
(d) None of the above.
Question 4 - The best explanation for the late 1994/early 1995 collapse of the Mexican peso and stock market is
(a) free movement of capital internationally is destabilizing for a developing country.
(b) portfolio investments were camouflaging overvalued exchange rates.
(c) debt for equity swaps had created imbalances in the ownership structure of the economy.
(d) the potential benefits of NAFTA had been oversold.
Question 5 - What is the relationship between economic development and the political institutions of democracy?
What will be an ideal response?
Question 6 - Why would a policymaker risk inflation if workers can just renegotiate their wages?
A) There is a change that workers will not fully anticipated the impact of the policy.
B) The policymakers want to look like they are actively involved in the economy.
C) Inflation is not a high price to pay in the economy.
D) The policymakers do not believe that the workers can renegotiate.
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