Which of the following provides the best explanation of why low-income countries generally remain poor?
A. Their political environment and policies often discourage productive activity and reduce the potential gains from specialization and exchange.
B. They are oppressed by developed nations that benefit from the cheap goods available from countries with low wage rates.
C. They are poorly endowed with natural resources, which are essential for long-term rapid growth.
D. When the average income level is low, workers have little incentive to earn higher incomes.
Answer: A
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A) charge lower than average loan rates to ensure repayment. B) impose stringent preconditions that the borrowers must meet. C) charge higher than average loan rates. D) make loans for less than 5 years only.
In general, the marginal cost curve
A) has a positive slope. B) has a negative slope. C) is horizontal. D) is vertical. E) is U-shaped.