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Chapter 18: Q.15 (page 414)

Take a look at Table 18-1. Based on the basic arithmetic of economic growth, what were the average annual rates of real GDP growth since 1990 for those nations experiencing negative rates of annual growth of per capita real GDP?

Short Answer

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the average annual rates of real GDP growth since $1990$ for those nations experiencing negative rates of annual growth of per capita real GDP is shown

Step by step solution

01

Given Information

GDP is the standard proportion of the worth added made through the development of labour and products in a country during a specific period. Accordingly, it additionally gauges the pay acquired from that creation or the aggregate sum spent on definite labour and products.

02

Explanation

the average annual rates of real GDP growth since $1990$ for those nations experiencing negative rates of annual growth of per capita real GDP are shown

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Most popular questions from this chapter

Some international policymakers argue that the world's poor require stronger "nudges, "such as policies that prevent them grow making "bad" choices. How might stronger nudges limit economic freedom and potentially slow economic growth? (What Does reducing the range of people's choices expand or limit their economic freedom??

Last year, $\(100$ million in outstanding bank loans to a developing nation's government were not renewed, and the developing nation's government paid off $\) 50$ million in maturing government bonds that had been held by foreign residents. During that year, however, a new group of banks participated in a $\(125$ million loan to help finance a major government construction project in the capital city. Domestic firms also issued $\) 50$ million in bonds and $$ 75$ million in stocks to foreign investors. All of the stocks issued gave the foreign investors more than $10$ percent shares of the domestic firms.

a. What was gross foreign investment in this nation last year?

b. What was net foreign investment in this nation last year?

Assume that each $1$ billion in net capital investment generates $0.3$ percentage point of the average percentage rate of growth of per capita real GDP, given the nation's labor resources. Firms have been investing exactly $6$ billion in capital goods each year, so the annual average rate of growth of per capita real GDP has been $1.8$ percent. Now a government that fails to consistently adhere to the rule of law has come to power, and firms must pay $100$ million in bribes to gain official approval for every $1$ billion in investment in capital goods. In response, companies cut back their total investment spending to $4$ billion per year. If other things are equal and companies maintain this rate of investment, what will be the nation's new average annual rate of growth of per capita real GDP?

Explain why population growth can have uncertain effects on economic growth.

For each of the following situations, explain which of the policy issues discussed in this chapter relates to the stance the institution has taken.

a. The IMF extends a long-term loan to a nation's government to help it maintain publicly supported production of goods and services that the government otherwise would have turned over to private companies.

b. The World Bank makes a loan to companies in an impoverished nation in which government officials typically demand bribes equal to $50$ percent of companies' profits before allowing them to engage in any new investment projects.

c. The IMF offers to make a loan to banks in a country in which the government's rulers commonly require banks to extend credit to finance high-risk investment projects headed by the rulers' friends and relatives.

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