What economic variables would you need to consider in order to distinguish between a developing country with a short-term balance of payments problem and one in a debt crisis? Explain what data you would need to look at and why
What will be an ideal response?
Look for an understanding that investment in exportable goods must increase above trend during borrowing to provide foreign exchange earnings sufficient to repay the debt without a drop in the standard of living.
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When a tax is imposed on the suppliers of a good or service, then
A) in general, the producers pay all the tax. B) in general, the consumers pay all the tax. C) the consumers pay a larger part of the tax as the elasticity of demand for the product becomes smaller. D) the consumers pay a larger part of the tax as the elasticity of demand for the product becomes larger.
An industry in which an increase in output leads to a reduction in long-run per-unit costs is a(n)
A) increasing-cost industry. B) constant-cost industry. C) break-even cost industry. D) decreasing-cost industry.