Refer to Figure 15-7. Suppose the economy is in a recession and no policy is pursued. Using the static AD-AS model in the figure above, this situation would be depicted as a movement from

Some low-income countries generally remain poor because

a. their institutional arrangements and policies often discourage productive activity and reduce the potential gains from specialization and exchange. b. they are oppressed by developed nations that benefit from the cheap goods available from countries with low wage rates. c. they are poorly endowed with natural resources, which are essential for long-term growth. d. when the average income level is low, workers have little incentive to earn higher incomes.

If the supply and demand curves below represent the market supply and demand for a purely competitive industry, then the demand curve that an individual firm in the industry faces:

A. Is identical to the market demand
B. Is equal to the marginal-revenue curve which is a flat line at P0
C. Is more elastic than the market demand but has a marginal-revenue curve lying below it
D. Has the same slope as the market demand, but at P0 its quantity demanded is only a fraction of Q0