Some Poor Countries Appear to Be Falling Behind Rather Than

question 88

Multiple Choice

Some poor countries appear to be falling behind rather than catching up with rich countries. Which of the following could explain the failure of a poor county to catch up?

• A) The poor country has outward-oriented trade policies.
• B) The poor country allows foreign direct investment.
• C) The poor country has poorly developed property rights.
• D) All of the above are correct.

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Definitions:

Total Investment

Total investment refers to the sum of all expenditures on capital goods by businesses and government within a specific time period.

Keynesian Range

A segment of the aggregate supply curve where output can increase without an increase in price levels, related to Keynesian economics theories.

Full Capacity

The maximum level of output that a company can sustain over a period without increasing long-term costs, often achieved by optimizing the use of resources.

Equilibrium GDP

The level of Gross Domestic Product where aggregate supply equals aggregate demand within an economy.