Most of the DVCs fiNd It Difficult to Accumulate Capital

question 214

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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