If the Per Capita Incomes of DVCs (Developing Countries)grew at the Same

question 36

Multiple Choice

If the per capita incomes of DVCs (developing countries) grew at the same annual rate as those of IACs (industrially advanced countries) , then the absolute income gap between rich and poor nations over the years would

• A)narrow.
• B)widen.
• C)stay the same.
• D)reverse.

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Definitions:

Money Demanded

The total amount of money that households and businesses want to hold at a given time, influenced by interest rates, income, and prices.

Interest Rate

The rate, calculated as a percentage of the principal, which a lender requires a borrower to pay for borrowing assets.

Money Market

A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded.

Excess Supply

A market condition where the quantity of a good supplied exceeds the quantity demanded at a given price, leading to surpluses.