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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

Identify which of the following situations currently faced by international investors are examples of adverse selection and which are examples of moral hazard.

$(a)$ Among the governments of several developing countries that are attempting to issue new bonds this year, it is certain that a few will fail to collect taxes to repay the bonds when they mature. It is difficult, however, for investors considering buying government bonds to predict which governments will experience this problem.

$(b)$ Foreign investors are contemplating purchasing stock in a company that, unknown to them, may have failed to properly establish legal ownership over a crucial capital resource.

$(c)$ . Companies in a less developed nation have already issued bonds to finance the purchase of new capital goods. After receiving the funds from the bond issue, however, the company's managers pay themselves large bonuses instead.

$(d)$ When the government of a developing nation received a bank loan three years ago, it ultimately repaid the loan but had to reschedule its payments after officials misused the funds for unworthy projects. Now the government, which still has many of the same officials, is trying to raise funds by issuing bonds to foreign investors, who must decide whether or not to purchase them.

Consider the estimates that the World Bank has assembled for the following nations:

Rank the nations in order, starting with the one you would expect to have the highest rate of economic growth, other things being equal. Explain your reasoning.

What does this tell us about a comparison of the average rate of growth of real GDP since 2000 in emerging and developing nations compared with advanced nations?

A developing country has determined that each additional $1$ billion of net investment in capital goods adds $0.01$ percentage point to its long-run average annual rate of growth of per capita real GDP.

a. Domestic entrepreneurs recently began to seek official approval to open a range of businesses employing capital resources valued at $20$ billion. If the entrepreneurs undertake these investments, by what fraction of a percentage point will the nation's long-run average annual rate of growth of per capita real GDP increase, other things being equal?

b. After weeks of effort trying to complete the first of $15$ stages of bureaucratic red tape necessary to obtain authorization to start their businesses, a number of entrepreneurs decide to drop their investment plans completely, and the amount of official investment that actually takes place turns out to be $10$ billion. Other things being equal, by what fraction of a percentage point will this decision reduce the nation's long-run average annual rate of growth of per capita real GDP from what it would have been if investment had been $20$ billion?

Identify the key functions of the World Bank and the International Monetary Fund.

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