Most of the DVCs Find It Difficult to Accumulate Capital

question 136

Multiple Choice

Most of the DVCs find it difficult to accumulate capital goods because

• A)the terms of trade prohibit the inflow of private capital from the advanced nations.
• B)it is very difficult to restrict consumption and thus to free resources for capital goods production.
• C)domestic monetary policies designed to achieve price stability result in low interest rates, thereby discouraging investment.
• D)investment is interest inelastic in DVCs.

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Definitions:

Chemical Changes

Reactions that result in the transformation of substances into one or more different substances, involving the making and breaking of chemical bonds.

Top-down Processing

A cognitive process that uses context and pre-existing knowledge to understand information.

Constriction

The act or process of drawing together or becoming narrower; it can apply to physical objects, bodily processes, or even psychological states.

Accommodation

In psychology, the process of adjusting existing cognitive structures in response to new experiences; in vision, the process by which the eye's lens changes shape to focus near or far objects on the retina.