Chapter 22: Q8RQ (page 456)
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.
The given statement is true.
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Do you think that the problems the DVCs face require a government-directed or a private-sector-directed development process? Explain your reasoning.
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.
Explain the difference among microcredit, conditional cash transfers, and unconditional cash transfers. Then explain how effective each policy has been.
List and discuss five policies that DVC government might undertake to promote economic development and expansion of income per capita in their countries?
Question. Assume that a very tiny and very poor DVC has income per capita of \(300 and total national income of \)3 million. How large is its population? If its population grows by 2 percent in some year while its total income grows by 3 percent, what will be its new income per capita rounded to full dollars? If the population had not grown during the year, what would have been its income per capita?
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