Less Developed Countries Are Often Characterized by Imperfect Capital Markets

question 48

Multiple Choice

Less developed countries are often characterized by imperfect capital markets.Assuming that the LCH applies to these countries and that a large proportion of the population is below fifty the

• A)MPC should be relatively high.
• B)MPC should be relatively low.
• C)frequency of liquidity constraints is low.
• D)sensitivity of consumption to loans is low.

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Definitions:

Working Backward

A problem-solving technique that identifies the final goal and the steps, in reverse order, that are necessary to reach the goal.

Sub-goals

Sub-goals are smaller tasks or objectives set as steps towards achieving a more significant goal, helping to organize and focus efforts.

Thinking

A cognitive process used to transform or manipulate information that may be either focused (i.e., solving problems with clear goals) or unfocused (i.e., invoking loosely related ideas without a clear purpose).

Information Given

The data or facts provided or available in a specific context or situation.