Suppose an LDC Is Producing on Its Production Possibilities Frontier

question 5

Multiple Choice

Suppose an LDC is producing on its production possibilities frontier such that it produces a subsistence level of consumption goods and enough capital goods just to replace the existing capital that depreciates. Foreign investment can lead to economic growth for this LDC in which of the following ways?

• A) The LDC uses the investment to control inflation.
• B) The mere presence of more money in the economy will lead to economic growth.
• C) The LDC invests in consumption goods to move beyond the subsistence level this year.
• D) The LDC invests in additional capital such that the rate of capital formation exceeds the value of capital depreciated.

---

Definitions:

Homeless

The state of having no permanent residence, often resulting in living in shelters, on the streets, or in inadequate housing.

Overdiagnosed

The phenomenon where individuals are diagnosed with a condition or disease more often than is factual or warranted, potentially leading to unnecessary treatment or intervention.

Mentally Ill Chemical Abusers

Individuals who suffer from both a serious mental illness and a substance abuse disorder, requiring integrated treatment for both conditions.

Homeless

The state of having no permanent residence, often resulting from a variety of factors including economic, social, and health-related issues.