Does It Matter How Much a Developing Country Saves? Explain

question 20

Essay

Does it matter how much a developing country saves? Explain why or why not.Discuss theoriesand evidence on whether developing countries can increase the net savings rate in the economy through public policy.In particular,consider whether this can be accomplished through increasedor decreased taxation of one or more types,and increased or decreased government spending ofone or more types.

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Definitions:

Short Run

In economics, a period where at least one input, such as plant size or capital, is fixed and cannot be changed, contrasting with the long run where all inputs can vary.

Short Run

A period of time in economics during which at least one input is fixed, limiting the immediate capacity of businesses to adjust to market changes.

Losses

Financial reductions resulting from the operation of a business, particularly when expenses exceed revenues.

Shut Down

In economics, shut down refers to a short-term decision by a firm to cease production because operating costs exceed the revenue generated, particularly when prices fall below variable costs.