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Unformatted text preview: 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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