What are the roots of the persistent famines in sub-Saharan Africa?
What will be an ideal response?
The immediate cause of famine is drought. Other causes are more complex. Civil strife has torn many nations for decades. Population growth has outstripped food production in many nations. Ecological degradation has occurred in nations that use marginal land for crop production. There are also poor public policies. Some governments spend four times as much on arms as they do on agriculture. Many African governments have followed the policy of establishing prices of agricultural goods at low levels to provide cheap food, but it diminishes incentives to produce. These nations also have large external debts to service. Paying interest on these debts can require governments to cut spending for health care, education, and infrastructure that only compound the problems. Even if the droughts end, the other problems will remain.
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The table above gives the demand schedule for water bottled by Wanda's Healthy Waters. If the marginal cost is a constant $4 a bottle, Wanda's will produce ________ a day and charge ________ a bottle
A) 8 bottles; $8 B) 4 bottles; $12 C) 1 bottle; $15 D) 6 bottles; $10
For each of the following scenarios, state the short-run effect on the AD curve
a. The price level decreases. b. The target inflation rate increases. c. The U.S. dollar falls in value relative to other currencies. d. Government spending increases. e. The Fed becomes more tolerant of deviations from the target inflation rate.