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.
A
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Consumption at points on a steeper part of the indifference curve will reflect a higher marginal rate of substitution than consumption points on a flatter part of the indifference curve
Indicate whether the statement is true or false
According to the Keynesian IS—LM model, what is the effect of each of the following on output, the real interest rate, employment, and the price level? Distinguish between the short run and the long run
(a) Expected inflation rises. (b) Wealth increases. (c) Labor supply decreases due to a change in demographics. (d) The future marginal product of capital decreases.