A . Explain why many less-developed economies have greater income inequality than more-developed economies. b. What is the key to greater income equality in less-developed economies? Explain
a . Most are predominately agricultural. Their strong dependence on agriculture restricts the range of
employment opportunities and increases dependence on world commodity markets.
b. The key seems to be the creation of nonagricultural employment and increasing education levels
throughout society. The more diverse the manufacturing activity in a country, the greater the numbers
and varieties of skilled, semiskilled, administrative, managerial, and professional jobs created.
Industrialization draws the agricultural poor from the countryside to the cities, broadening the base of
the country's middle class.
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According to the aggregate supply-aggregate demand model, an expansionary fiscal policy will, in the long run,
a. have the opposite effect of an expansionary monetary policy b. increase both real GDP and the price level c. increase real GDP and decrease the price level d. increase real GDP and leave the price level unchanged e. increase the price level and leave real GDP unchanged
Figure 4-12
Refer to . The exhibit illustrates the impact of granting a subsidy on a particular good. Which of the following is true for this subsidy given the information provided in the exhibit?
a.
The subsidy has been statutorily (legally) paid to buyers.
b.
The subsidy results in an increase in the selling price of the good.
c.
Sellers will receive a larger proportion of the benefit from this subsidy than buyers.
d.
All of the above are true.