An important reason why economies at an early stage of development tend to operate inefficiently is
A) they tend to be dominated by the agricultural sector, where productivity is usually low.
B) they tend to have authoritarian governments that stifle innovation.
C) they tend to be plagued by superstitious beliefs that stifle innovation.
D) the high transactions costs associated with barter.
D
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Which of the following statements is TRUE about scarcity?
A) Both rich and poor people face the problem of scarcity. B) Scarcity exists only when supply is insufficient to meet demand. C) Scarcity exists only when a shortage exists. D) Scarcity can be eliminated when a country becomes richer.
The cyclical unemployment rate is positive when
A. frictional unemployment equals structural unemployment. B. there is an expansionary gap. C. the output gap equals zero. D. there is a recessionary gap.