Development assistance is designed to encourage a developing country to
a. increase consumer goods today.
b. restrict the inflow of foreign direct investment.
c. invest in its capital stock.
d. reduce labor productivity.
a
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Suppose Freeland produces few consumption goods and many investment goods while Liberty Nation produces few investment goods and many consumption goods. Other things equal, you would expect a. per capita income to grow more rapidly in Liberty Nation
b. population to grow faster in Liberty Nation. c. the production possibilities curve for Freeland will shift out more rapidly than that of Liberty Nation. d. that if both countries started with identical production possibilities curves, in twenty years, people in Liberty Nation will be able to produce more consumer goods than people in Freeland.
Consider a small economy in which consumers buy only two goods: pretzels and cookies. In order to compute the consumer price index for this economy for two or more consecutive years, we assume that
a. the percentage change in the price of pretzels is equal to the percentage change in the price of cookies from year to year. b. the number of pretzels bought by the typical consumer is equal to the number of cookies bought by the typical consumer in each year. c. neither the number of pretzels nor the number of cookies bought by the typical consumer changes from year to year. d. neither the price of pretzels nor the price of cookies changes from year to year.