How have government inefficiencies contributed to the creation of dead capital in the world's developing nations?
What will be an ideal response?
Governments in developing nations place obstacles in the way of entrepreneurs interested in owning capital goods and directing them to profitable opportunities. Poorly administered government regulations reduce investment in new capital goods. Because of the poor administration investors are unwilling to risk having their investment turn into dead capital.
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In many economies, a substantial fraction of investment is by multinational corporations (MNCs) whose stock value is determined on global markets
Based on Tobin's q theory, how might we expect MNC investment to affect the volatility of aggregate investment in an economy?
The greater is the risk of non-repayment of a loan, the
A) higher is the expected rate of interest. B) longer is the expected time to repay the loan. C) lower is the handling charges for the loan. D) lower is the expected rate of interest.