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Solutions for Chapter Module 38 : Productivity and Growth

Full solutions for Krugman's Economics for AP* | 2nd Edition

ISBN: 9781429218276

Solutions for Chapter Module 38 : Productivity and Growth

Since 5 problems in chapter Module 38 : Productivity and Growth have been answered, more than 13193 students have viewed full step-by-step solutions from this chapter. This expansive textbook survival guide covers the following chapters and their solutions. This textbook survival guide was created for the textbook: Krugman's Economics for AP*, edition: 2. Krugman's Economics for AP* was written by and is associated to the ISBN: 9781429218276. Chapter Module 38 : Productivity and Growth includes 5 full step-by-step solutions.

Key Business Terms and definitions covered in this textbook
  • ability-to-pay principle

    the idea that taxes should be levied on a person according to how well that person can shoulder the burden

  • bank capital

    the resources a bank’s owners have put into the institution

  • budget constraint

    the limit on the consumption bundles that a consumer can afford

  • capital

    the equipment and structures used to produce goods and services

  • complements

    two goods for which an increase in the price of one leads to a decrease in the demand for the other

  • corrective tax

    a tax designed to induce private decision makers to take account of the social costs that arise from a negative externality

  • depression

    a severe recession

  • in-kind transfers

    transfers to the poor given in the form of goods and services rather than cash

  • inferior good

    a good for which, other things being equal, an increase in income leads to a decrease in demand

  • investment

    spending on capital equipment, inventories, and structures, including household purchases of new housing

  • market for loanable funds

    the market in which those who want to save supply funds and those who want to borrow to invest demand funds

  • median voter theorem

    a mathematical result showing that if voters are choosing a point along a line and each voter wants the point closest to his most preferred point, then majority rule will pick the most preferred point of the median voter

  • money multiplier

    the amount of money the banking system generates with each dollar of reserves

  • natural monopoly

    a monopoly that arises because a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms

  • permanent income

    a person’s normal income

  • regressive tax

    a tax for which highincome taxpayers pay a smaller fraction of their income than do low-income taxpayers

  • screening

    an action taken by an uninformed party to induce an informed party to reveal information

  • substitutes

    two goods for which an increase in the price of one leads to an increase in the demand for the other

  • sunk cost

    a cost that has already been committed and cannot be recovered

  • utility

    a measure of happiness or satisfaction

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