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Chapter 22: Q2RQ (page 456)

Question. True or False: A DVC that has little in the way of natural resources is destined to remain poor.

Short Answer

Expert verified

The statement is false.

Step by step solution

01

Natural resource

Natural resources refer to those resources which a nation has due to its geographical or demographical advantage. These are resources that are present naturally and are not a result of human action; for example, minerals, water resources, and others.

02

Reason for the statement being false

The availability of natural resources is a factor that influences the economic growth of a nation. The better availability of natural resources can help accelerate economic growth, but the lack of availability of natural resources won’t make a country remain in the cycle of poverty.

In a world of free trade and open markets, those countries that lack the availability of natural resources will hire out it from other countries and find a solution to their issue. Japan is an example of this, which has achieved economic growth with limited resources.

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Most popular questions from this chapter

List and discuss five policies that DVC government might undertake to promote economic development and expansion of income per capita in their countries?

Question. Compare a hypothetical DVC with a hypothetical IAC. In the DVC, average per capita income is \(500 per year. In the IAC, average per capita income is \)40,000 per year. If both countries have a savings rate of 10 percent per year, the amount of savings per capita in the DVC will be _____ per person per year, while in the IAC, it will be _______ per person per year

a. \(50; \)4000

b. \(5; \)400

c. \(450; \)36,000

d. None of the above

True or False. Some economists argue that the single best thing that IACs could do for DVCs in terms of economic growth is to eliminate trade barriers between IACs and DVCs.

Question. Assume a DVC and an IAC currently have real per capita outputs of \(500 and \)50,000, respectively. If both nations have a 3 percent increase in their real per capita outputs, by how much will the per capita output gap change?

Question. A DVC’s population is growing 2 percent per year and output is growing 3 percent per year. If the government wants to improve living standards over coming decades, which of the following would probably be the best savings rate for the economy?

a. 2 percent.

b. 0 percent.

c. 10 percent.

d. 5 percent.
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