Contractionary fiscal policy will lead to an increase in government borrowing.

Suppose the government decides that a particular commodity is a luxury and decides to fix its price above the market-determined price. What implications could this policy have?

What will be an ideal response?

Openness and change in the economic models of India and China have meant for the world economy all of the following EXCEPT

A) hundreds of millions of people have escaped poverty. B) many manufactured goods and services have become cheaper. C) forced some firms to downsize, offshore or otherwise change business practices. D) increased the market power of firms in industrialized countries as they gained most from this evolving trade.