Have a ECON Question.. Please help?

Question

Forgoing consumption today for consumption in the future is achieved by

a. a ban on the production of consumer goods. b. a reduction in consumer income. c. an increase in borrowing. d. an increase in saving. e. a high-growth monetary policy.

Which of the following statements concerning the determinants of economic growth is not true?

a. Abundant natural resources are a necessary condition for economic growth. b. The lower the standard of living in a country, the harder it is to forgo current consumption to obtain capital. c. Developing countries tend to lag behind industrial countries in developing and implementing new technology. d. The productivity of a labor force is more important than its size. e. Industrial countries can afford to spend more on developing new technologies than developing countries.

A tariff imposed on foreign imports will cause

a.domestic productivity to increase. b.import prices to fall. c. domestic prices to rise. d. market demand to fall

Answer 1

1: d. an increase in saving. - Saving induce investments and investments ensures expansion of future production.

2: a. Abundant natural resources are a necessary condition for economic growth.

3: c. domestic prices to rise. - tariff creates left-ward shift of supply thus reducing quantity and increasing price - but demand remains the same.

Answer 2

1. d. increase in saving (when people are saving more, they are spending less now so they can spend more later.

2. a. Abundant natural resources are a necessary condition for economic growth. (countries can specialize in whatever, so they need only certain resources)

3. d. market demand to fall (tariffs on imports cause domestic consumers to want to buy less of the good since it costs more)