Which of the Following Provides the Best Explanation of Why

question 97

Multiple Choice

Which of the following provides the best explanation of why low-income countries generally remain poor?

• A) Their institutional arrangements and policies often discourage productive activity and reduce the potential gains from specialization and exchange.
• B) They are oppressed by developed nations that benefit from the cheap goods available from countries with low wage rates.
• C) They are poorly endowed with natural resources, which are essential for long-term rapid growth.
• D) When the average income level is low, workers have little incentive to earn higher incomes.

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Definitions:

Financial Statements

These are formal records that outline the financial activities and condition of a business, entity, or individual.

Net Income

The final profit figure for a company, calculated by subtracting all expenditures and taxes from revenues.

Total Liabilities

The combined debts and obligations that a company owes to outside parties at any given time.

Accrued Expenses

Expenses that have been incurred but not yet paid for, often recognized in accounting through an adjusting entry.