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20 Jan 2018

pick all that apply to which statements correctly describes Controls and Freedom.

1 When government taxes income, it reduces economic freedom.
2 In the past 50 years, the expanding role of government is evidence of the movement toward a centrally controlled economy.

3 None of the answers are correct.
4Government taxes and controls more than 40% of the economy. That means it takes away 40% of people's income and spends it on what government chooses rather than on what individuals choose.

5When government taxes corporate profits, it reduces economic freedom.
6When government outlaws birth control, it reduces economic freedom.
7 When the government outlaws the sale, distribution, and consumption of marijuana, it reduces economic freedom.
8 In the past 50 years, the U.S. has moved away from a purely free market economy and moved toward a centrally controlled economy.

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22 Jan 2018
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Related questions

Dalum Papir A/S is almost halfway through its second century as a Danish paper manufacturer. Years ago, the firm was one of many paper companies, but now it constitutes one- half of Denmark's two-firm paper industry. The company utilizes highly energy-efficient techniques to manufacture glossy paper from recycled materials for magazines. Dalum Papir has had little choice but to conserve energy. Government taxation has boosted energy prices more than 45 percent above the U.S. level. Also, like other Danish firms, Dalum Papir must meet government-mandated standards for energy conservation.

Ever since the 1970s, when a worldwide spike in oil prices set off a prolonged recession, Denmark's government has sought to shield the nation's economy from future aggregate supply shocks induced by jumps in energy prices. Toward that end, it has enacted high energy taxes and tough regulatory conservation measures. A consequence is that Danish oil consumption per $1 million of real GDP has declined by more than 30 percent - to 120 tons o oil per $1 million of real GDP - over the last 30 years. Indeed, Denmark's total oil consumption has remained unchanged since the late 1970s. Thus, consistent with the government's intent, whenever oil prices suddenly shoot up, Denmark's economy tends to experience smaller aggregate supply shocks than it did in years past.

As the experience of Dalum Papir and the dwindling Danish paper, industry illustrates, however, the government's quest for aggregate supply stability has come at the cost of growth in the production of goods and services. Since the late 1970s, Denmark's real GDP has doubled, whereas U.S. real GDP has quadrupled. During that period, total U.S. oil consumption has increased by more than 40 percent, yet because U.S. real GDP has increased fourfold, U.S. oil consumption per $1 million of real GDP has fallen by more than 25 percent - almost as much as the percentage decline in Danish oil consumption per $1 million in real GDP. Thus, although the Danish economy is less susceptible than the U.S. economy to aggregate supply shocks, Denmark's aggregate supply is growing at about half the pace at which the U.S. aggregate supply is expanding.

1. Why do unexpected variations in energy prices generate aggregate supply shocks, which sudden changes in total planned expenditures do not?

2. Other things being equal, why might we expect the Danish price level to be more stable over time than the U.S. price level?


48. In order to be classified officially as unemployed, a personmust
a. Be out of work and available for work, need not be activelylooking for work
b. Be out of work, actively looking for work, and currentlyavailable for work
c. Only be out of work
d. Have been out of work for over 3 months

49. If exports rise and imports fall, (ceteris paribus)
a. Aggregate expenditure falls
b. Aggregate expenditure rises
c. Aggregate expenditure remains the same
d. Net exports are irrelevant when considering aggregateexpenditure

50. Over the past 25 years, the U.S. has had a net trade____________; which means
the U.S. has exported _________ it has imported.
a..Deficit; less than
b. Balance; the same amount as
c. Deficit; more than
d. Surplus; more than

43. If our economy was experiencing inflation, which of thefollowing would move us
back toward macro equilibrium?
a. Lower Taxes
b. Increase Investment
c. Reduce Net Exports
d. Increase Consumer Spending


42. If our economy slumped into a recession, which of the followingwould help move us back toward macro equilibrium?:
a. Reduce Taxes
b. Reduce Investment
c. Reduce Net Exports
d. Reduce Government Purchases

34. Economists consider that we are at full employment whenthe
a. Officially reported unemployment rate is at the naturalunemployment rate, about 5%
b. Natural unemployment rate is equal to 10 %.
c. Officially reported unemployment rate is zero.
d. Natural unemployment rate is equal to 0 percent.

35. Beginning at macro equilibrium, inflation occurs becauseaggregate
a. supply increases more rapidly than aggregate demand.
b. supply and aggregate demand increase at the same rate.
d. supply and aggregate demand decrease at the same rate.
c. demand increases more rapidly than aggregate supply.

36. If the U.S. government decreases significantly its expenditureon defense, then, ceteris paribus, the aggregate
a. demand curve shifts rightward.
b. demand curve shifts leftward.
c. supply curve shifts rightward.
d. supply curve shifts leftward.

37. According to Keynesian economics, which of the following ismost likely to raise the unemployment rate?
a. Aggregate demand increases.
b. Aggregate demand decreases.
c. Aggregate supply increases.
d. None of the above is likely to raise the unemploymentrate.

38. If a government has a budget deficit, it must
a. raise the real interest rate.
b. borrow in the financial market.
c. decrease taxes.
d. Increase spending

39. The U.S. gross public debt is approximately ________________which is
approximately ______________ % of U.S. GDP.

40. Under the U.S. Constitution, the ultimate power for determiningfiscal policy is:
e. The President
f. The Congress
g. The Council of Economic Advisors
h. The State governments


32. The Marginal Propensity to Consume (MPC) is:
e. The rate at which consumption changes over time
f. The percentage of an additional dollar of disposable income thatwill go toward additional consumption
g. The average percentage of total income one consumes
h. The average percentage of total income one saves

Consider the following excerpts:

Excerpt 1:

Saudi Arabia is ramping up efforts to lure international companies and revive Crown Prince Mohammed bin Salman's plans for an economic makeover after foreign investment fell to a 14-year-low in 2017.

The moves include plans to create two investment funds totalling over $18 billion for the government to enter into ventures with foreign companies, said people familiar with the matter. The kingdom is also pouring billions into entertainment-industry partnerships and working with SoftBank Group's Vision Fund to bring technology firms to Saudi Arabia.

The first modern Saudi bankruptcy law is due to soon come into effect. The government has also drawn up a law on public-private partnerships, the first step toward the sale of billions of dollars in state-owned assets that the government hopes will attract foreign investment in big infrastructure projects.

Prince Mohammed is trying to shift the economy away from oil and toward industries that provide growth and jobs for Saudis. The first steps toward economic reform included cutting subsidies and adding taxes to narrow the budget deficit.

He has introduced social reforms such as allowing women to drive and opening cinemas. He has also forged an alliance with the Trump administration and shifted the kingdom into a more firm posture against Iran. But some of his economic plans have so far stalled.

 

The Saudi economy contracted last year, largely as a result of lower oil prices, and only emerged from recession in the first quarter of this year. The prospect of years of low oil prices helped spark Prince Mohammed's calls for economic reform, though prices have rallied in recent months.

Also worrying some investors was the detention of Saudi business leaders last fall in what the kingdom said was an anticorruption crackdown. The charges weren't aired publicly and some businessmen remain jailed; the government has moved to collect over

Saudi officials have said the crackdown should assure investors that the kingdom is serious about securing a stable rule of law, and the crown prince sought to win more American business on a nearly three-week visit to the U.S. this spring.

 

Excerpt 2:

Saudi Arabia's premier business conference opened as scheduled Tuesday, missing the star power of Western executives who cancelled over a Saudi journalist's death but packing a surprise: an unexpected visit from Crown Prince Mohammed bin Salman.

 

The event, the Future Investment Initiative, once again served as a forum for promoting Saudi investment and Prince Mohammed's modernization plans. But the gathering was stripped down from last year's inaugural session as the kingdom wrestled with corporate and diplomatic fallout in the wake of allegations that the Saudi government was involved in Jamal Khashoggi's Oct. 2 death in the Saudi consulate in Istanbul.

 

"Everybody is talking about it," said Henry Fernandez, chief executive of MSCI Inc., a U.S.-based markets-index compiler, speaking of Mr. Khashoggi's death. Despite that, he said the conference remained focused on engagement [with Saudi Arabia], not divestment...

 

The reaction to Mr. Khashoggi's death threatens to derail Prince Mohammed's plan to re-engineer the kingdom's economy to make it less reliant on oil income. The event is the prince's most visible effort to attract international investments by presenting the country as a business-friendly place that embraces new technologies

 

The event drew more than 3,000 investors, business leaders and advisers, according to the event app, but attendees also estimated hundreds had withdrawn. Many Western dropouts were replaced by representatives from Russia, Asia and the Arab world.

 

Among those who remained, French oil giant Total SA's CEO, Patrick Pouyanne, showed up alongside regional investment bank heads. Lucid Motors Inc., a California-based electric vehicle maker in which Saudi Arabia has committed to invest $1 billion, showcased the only prototype of its planned first car in the hotel's lobby.

 

Shahid Kazi, chief executive of Dubai-based consultancy ValuStrat, said Western executives who cancelled may have put a dampener [on the event] and may have disappointed people. But I wouldn't say it [the event] isn't useful. The Saudis are all here. That's who we really want to meet.

 

Still, there were signs that the gathering was off to an inauspicious start.

 

Last year, Western attendees arriving here were whisked to a luxurious airport lounge serving Arab coffee and dates. On Monday night, they lined up for passport control like everyone else.

 

The conference's website appeared to be hacked and was unavailable for hours Monday. Meantime, the World Economic Forum, which runs the eponymous event in the Swiss resort of Davos each year, formally objected to the gathering's nickname, Davos in the Desert.

 

Investors have divested more than $720 million from the Saudi stock market since Mr. Khashoggi's disappearance. The stock market, known as the Tadawul, is down about 4% since then.

What motives might drive technology and entertainment companies to invest in Saudi Arabia?

 

What are the risks associated with FDI in Saudi Arabia?

 

Why is the Saudi government so active (reform, conferences, risk-sharing) in bringing FDI back to Saudi Arabia?

 

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