Author Question: Consider two countries-country A and B. Both countries are exactly similar in all aspects except for ... (Read 79 times)

dmcintosh · **on:** Jun 30, 2018

Consider two countries-country A and B. Both countries are exactly similar in all aspects except for one. In country B it is possible for entrepreneurs to borrow money from banks and financial markets.

While in country A, there is no loan for entrepreneurshiA) Country A is likely to grow faster than country B.
B) Country B is likely to grow faster than country A.
C) Both countries are likely to grow at the same rate.
D) Resources are likely to be over consumed in country A and under consumed in country B.

Question 2

Refer to the figure above. Other things remaining the same, assume that the individual now has a higher opportunity cost of time. Which of the following statements is true in this context?

A) Optimization in levels will not lead to an efficient outcome.
B) The cost curve will move u