Consider a Solow economy that begins with a capital stock equal to $300 billion, and suppose its steady-state level of capital is $500 billion. To its pleasant surprise, the economy receives a generous gift of foreign aid in the form of $100 billion worth of capital (electric power plants, machine tools, etc.). (a) Use the Solow diagram, other graphs, and the mathematics of the Solow model to explain what happens to the economy, both immediately and over time. By what proportion does consumption per person initially increase? What happens to consumption in the long run? (b) Suppose instead of starting below its steady state, the economy begins in steady state, with a capital stock equal to $500 billion. Answer part (a) for this case. (c) Summarize what this exercise teaches you about the possible consequences of foreign aid. In this example, does foreign aid exert a long-run effect on the welfare of poor countries? What is the benefit of foreign aid?

An employer who is considering hiring eva has asked donna, eva’s former supervisor, for a report on eva. in truth, eva’s work for donna has been only average. however, eva is donna’s friend, and donna knows that eva probably will not get the job if she says anything negative about eva, and donna knows that eva desperately needs the job. further, donna knows that if the situation were reversed, she would not want eva to mention her deficiencies. nevertheless, it has been donna’s policy to reveal the deficiencies of employees when she has been asked for references by employers, and she knows that some of eva’s faults may be bothersome to this particular employer. finally, this employer has leveled with donna in the past when donna has asked for a report on people who have worked for him. should donna reveal deficiencies in eva’s past performance? (remember to use one of the three moral theories acceptable for this test to solve this dilemma. any discussion of any personal opinion, religious perspective, or theory other than the moral theories acceptable for this test will result in a score of "0" for this question.)

The rybczynski theorem describes: (a) how commodity price changes influence real factor rewards (b) how commodity price changes influence relative factor rewards. (c) how changes in factor endowments cause changes in commodity outputs. (d) how trade leads to factor price equalization.

Paddock pools constructed a swimming pool and deck for the jensens' home. paddock installed the wrong trim on the pool. it would cost $2800 to change the trim-one-fifth of the total cost of the pool. the jensens refuse to pay anything for the pool. the paddock's best defense is: (a) duress (b) substanial performance (c)mistake (d) failure of conditions