Explain why the LDCs are unable to invest much in capital goods and human capital.
What will be an ideal response?
The demands of the growing populations in these countries force them to devote most of their resources to the production of consumption goods, and not enough to the production of capital goods or human capital.
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A player can choose among three strategies: T, M, and B. Nevertheless, strategy B is dominated by strategy T. This means that
A) strategy T is always played. B) strategy B is never played. C) strategy B will be part of a Nash equilibrium. D) strategy M is never played.
Which of the following statements is true?
A. Inflation will have no effect on an individual whose income is indexed to the inflation rate. B. An individual living on a fixed income is always made better off as a result of deflation. C. Everyone in society benefits from inflation. D. Those individuals receiving welfare benefits have been harmed by inflation because increases in welfare payments have not kept pace with inflation.