The World's Economies Can Be Divided into Four Main Categories

question 45

Multiple Choice

The world's economies can be divided into four main categories according to their annual per-capita income levels: low-income, lower middle-income, upper middle-income and high-income economies. What category would Pakistan and India fall under?

• A) low-income
• B) upper middle-income
• C) high-income
• D) lower middle-income
• E) Pakistan and India fall between lower-middle and upper-middle.

Grasp the relationship between saving and investment in an economy.

Understand how interest can exist without a formal currency in a barter economy.

Recognize the differences between investing in physical capital and human capital.

Appreciate the conditions necessary for benefiting from technological advances and entrepreneurial ideas.

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Definitions:

Marginal External Cost

The cost of producing one additional unit of a good or service that is borne by society but is not considered by the produce.

Marginal Social Cost

The total cost to society of producing an additional unit of a good or service, including both the private costs and any external costs.

Oil Refinement

The industrial process of transforming crude oil into usable products including fuels, lubricants, and petrochemicals.

Pollution

The contamination of the natural environment, which can lead to harmful effects on ecosystems and human health.