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P.S. Notes for 4-13-11 - ECONOMICS LECTURE CONTINUED*Term...

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ECONOMICS LECTURE CONTINUED… **Term Paper due this coming Monday!!** - Grading rubric posted on Blackboard. Under the Free Market - New industries would be at a disadvantage. Economies of scale, less competitive goods. - Usually fail. ISI tries to prevent this, forcing people to use local industry. The $2,000 Indian Car - The more successful versions of ISI were in big and not-too-poor countries (large market for homegrown goods). Results? 1 st Indian-made subway cars - Some sectors did better than others. - Employment not as great as anticipated. - Still dependence on input from overseas. - ISI firms taken over by foreigners. Problems with ISI: - Inefficiency and low-quality goods. - Production is determined by govt, not demand. - Some necessities still have to be purchased from overseas. Progressive/Regressive Taxes - Regressive: Everybody pays the same tax, regardless of income. o Ex. – AL food taxes. - Progressive: Rich pay more tax. Inflation - Rise in prices in general. - Consumers and governments have lots of money to spend, compared to the quantity of things they want to buy. Drives prices up.
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