Suppose a Developing Country Is Falling Further Behind the Developed

question 38

Multiple Choice

Suppose a developing country is falling further behind the developed countries that it neighbors. As an economic consultant you are called to look at its policies to recommend changes. If you saw all of the following on your visit, which of them could be an explanation for the slow growth in the economy?

• A)You see that new companies must bribe local officials to move their exports to the docks.
• B)You see that the central bank does not pay attention to what the elected officials want.
• C)You see that the roads, bridges, and ports are in great shape thanks to the work of the World Bank.
• D)You see that literacy rates rival those of its developed neighbors

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Definitions:

BAT Model

A model used in negotiation that stands for Best Alternative To a Negotiated Agreement, helping parties determine their course of action should negotiations fail.

Disbursements

Money paid out by a business or an organization for various purposes, including expenses, investments, and dividends.

Optimal Initial Cash Balance

The ideal amount of cash that a company should hold at the start of a period to efficiently meet its operational needs and investment opportunities, while minimizing holding and shortage costs.

Transferring Funds

Transferring funds involves moving money from one account to another, either within the same financial institution or across different institutions.