Consider the following hypothetical data for a developing country:
Year Total Debt ($ bn) Debt/Export (%) GDP Growth Inv. Growth
1 6 134 0.6% –1.0%
2 6.5 147 2.9% 1.1%
3 7 159 5.1% 1.6%
4 7.5 174 6.4% 2.4%
5 8 198 1.1% –0.6%
Does this country have a debt crisis? What additional pieces of quantitative or qualitative evidence
(if any) would help you to decide?
Various answers are plausible and this will depend on lecture coverage. Close attention
to investment growth should be found in students' answers.
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All else equal, as the price of a product falls, the quantity supplied increases
Indicate whether the statement is true or false
Suppose that the price of wheat is above its equilibrium price. You would expect to see
A) a shortage on the market that causes prices to increase further. B) an increase in quantity demanded because of the high price. C) a leftward shift of the demand curve because of the high price. D) sellers begin to lower their prices because of the surplus of wheat.