Why do poor countries often have lower rates of economic growth than richer countries?
What will be an ideal response?
If a large part of a country's population is poor, it is very difficult to forgo current consumption to invest in research and development of new technologies or new capital equipment. With less investment, the rate of economic growth in the country will be lower.
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Both optimization in levels and optimization in differences:
A) consider only the benefits from different alternatives. B) consider only the costs incurred in different alternatives. C) provide identical answers when comparing two alternatives. D) require the calculation of change in net benefits of switching from one alternative to another.
Suppose you are graphing the quantity of bagels on the vertical axis and the quantity of coffee on the horizontal axis. A household's real income in terms of bagels is the
A) relative price of coffee. B) relative price of bagels. C) point at which the budget line intersects the x-axis. D) point at which the budget line intersects the y-axis.