An Obstacle to Economic Growth in Developing Countries Is

question 56

Multiple Choice

An obstacle to economic growth in developing countries is

• A) the limited demand for natural resources.
• B) the limited supply of capital goods.
• C) a decline in population growth.
• D) the low productivity of capital.

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Definitions:

Substitution Effect

The alteration in the consumption of goods as a result of changes in their relative prices, leading consumers to substitute more expensive items with cheaper alternatives.

Output Effect

The change in total revenue resulting from selling additional units due to a price decrease, in the context of price elasticity of demand.

Income Effect

A change in the quantity demanded of a product that results from the change in real income (purchasing power) caused by a change in the product’s price.

Wage Rate

The amount of compensation offered to an employee per unit of time (e.g., hourly, daily) or piece of work done.