Why Is the Fear of Expropriation an Obstacle to Economic

question 57

Multiple Choice

Why is the fear of expropriation an obstacle to economic growth?

• A)Without research and development, no technological advances can be made.
• B)Large government spending causes negative externalities.
• C)Powerful special interest groups have too much control.
• D)Because of the lack of guarantees, no foreign investment comes to the country.
• E)Because of this fear, too many resources are devoted to military spending which is a highly unproductive sector.

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Definitions:

Operating Income

Earnings from a company's core business operations, excluding expenses and revenues from non-operational activities like investment income.

Absorption Costing

A costing method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in the cost of a product.

Manufacturing Margin

The difference between the sales revenue of manufactured goods and the direct costs associated with producing them.

Contribution Margin

The difference between the sales revenue of a product and its variable costs, used to cover fixed costs and generate profit.