Some Poor Countries Appear to Be Falling Behind Rather Than

question 88

Multiple Choice

Some poor countries appear to be falling behind rather than catching up with rich countries. Which of the following could explain the failure of a poor county to catch up?

• A) The poor country has outward-oriented trade policies.
• B) The poor country allows foreign direct investment.
• C) The poor country has poorly developed property rights.
• D) All of the above are correct.

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Definitions:

Environment Clean-up

The process of removing pollutants or contaminants from environmental media such as soil, groundwater, sediment, or surface water for the general protection and enhancement of the environment.

Negative Externality

A situation where the production or consumption of a good or service results in a harmful effect on unrelated third parties.

Market Equilibrium

Occurs when the quantity of a product demanded by consumers equals the quantity supplied by producers, leading to a stable price.

Socially Optimal Level

An economic condition where resources are allocated in a way that maximizes the overall benefit to society, considering both efficiency and equity.