In facilitating the transition from a centrally planned to a market-oriented economy, explain the difference between the "shock therapy" versus "gradualism" approach
What will be an ideal response?
The proponents of the "shock therapy" approach argue that the transition should be aggressive, quick, direct, and simultaneously impact all economic variables. In contrast, the "gradualism" approach recommends moderate and sequential changes over time starting with the development of market institutions, the gradual decontrol of prices, and the limited privatization of only the most cost efficient state-owned and operated businesses.
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Between 1864 and 1900, the largest portion of railroad track (as a percentage of total annual construction) was laid in which region of the U.S.?
a. the Southeast b. the Northeast c. the Pacific Northwest d. the Great Plains region
The law of diminishing returns states that as more workers are hired, beyond some point,
a. total output will fall b. total cost will fall c. marginal physical product will fall d. total cost will rise e. total output will rise