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What do you think of the vicious circle of underdevelopment? Is it a valid theory? If it is valid, how can the vicious circle possibly be broken?
What are the two major methods used to compare incomes between nations, and what are the strengths and weaknesses of each?
Suppose that you could live for free (on the floor) with some relatives. Would you then have enough to pay for food, clothes, or school?
Discuss the role of time in balance-of-payments adjustments. Why will short- and long-run effects of a depreciation probably differ?
What is a balance-of-payments deficit? Under a flexible exchange system, will a balance-of payments deficit automatically be corrected? Explain.
Detail the pros and cons of building in both a developed country and an emerging economy. What is your final selection? Why?
No patriotic Americans want the value of the dollar to continue falling on exchange market. Do you think that a depreciation in the value of the dollar is bad?
What do you think will happen to the monopoly power of OPEC with time? Can you think of any policy alternatives that western nations might adopt to free?
What types of goods and services are traded in the market? Given its socialist objectives, why does the Soviet Union permit a market sector?
What is inflation? If the price of swimming pools rose during an extremely hot summer, would this be inflationary? How does one measure inflation?
When is an economy at full employment? How are the concepts of frictional and structural unemployment related to the definition of full employment?
If disposable income is $ 10,000 and current consumption is $9000, what is the average propensity to consume (APC)?
If planned gross investment is $100 billion, expected government expenditures are $300 billion. What is equilibrium GNP?
Explain what is meant by planned saving and planned investment. What happens to aggregate income when planned saving is equal to planned investment?
In the Keynesian view, what are the major determinants of investment? What is the major determinant of aggregate consumption?
Explain in your own words why the equilibrium level of income will decline when planned leakages are in excess of planned injections.
Write a short essay explaining the logic of Keynesian theory of the business cycle. Incorporate both multiplier and accelerator principles into your discussion.
Calculate the change in equilibrium GNP that would be stimulated by autonomous increase in gross investment of 50 in an economy with a fairly stable MPC of 2/3.
Assume that a government increases expenditures by $50 billion, while increasing taxes by $30 billion. What direction and by how much should GNP change?
Calculate equilibrium GNP for an economy in which planned gross investment is $200 billion; expected government expenditures are $300 billion.
Why should only production of final goods and services be counted? How does MEW differ from GNP? Is it an improvement? Why?
What are some of the deficiencies of GNP as a measure of aggregate output? Why do national income accountants not correct these shortcomings?
Explain the difference between the money GNP and real GNP. Does it make any difference which of the two is used to gauge economic activity?
What are the major sources of federal tax revenues? State revenues? Local revenues? Who bears the burden of a payroll tax?
Write a short campaign position paper outlining your platform on government spending and taxation policy.