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1 Selected “Eleventh Principle of Economics” by GT students. I rewrite your answers in my words (in red). The group members that answered the following answers (in black) will get an extra credit of 0.5%. 1. The more resources a country has, the more opportunity for growth. Î A country’s potential for long term growth is favorably affected by its resources such as natural resources and human resources. 2. Competitive markets make consumers happy. Î A more competitive market generally results in a lower price so that consumer welfare increases. 3. Household income affects personal lifestyle. Î A household’s consumption pattern can be considerably affected by its income level. 4. Greater rewards come with greater risk. Î A higher expected rate of return generally requires a greater exposure to risks. 5. Chain market effect: What happens is one market affects others. Î Markets are inter dependent to some extent so that there could be various dynamics between markets. 6. Irrational thinking causes inflation. Î Expectation for a higher inflation leads to actual inflation even without any change in production cost. 7. High inflation adversely affects institution that give out loans at fixed rates. Î
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Result+of+Activity+1 -...

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