Refer to Figure 24-3. Suppose the economy is at point A. If ...

[tingc95]

Refer to Figure 24-3. Suppose the economy is at point A. If government spending increases in the economy, where will the eventual long-run equilibrium be?
 
  A) A B) B C) C D) D

Question 2

Refer to Table 22-6. Consider the statistics in the table above in describing the developing countries. Are these consistent with the economic growth model? Briefly explain.
 
  What will be an ideal response?

[sarajane1989]

Answer to Question 1

C

Answer to Question 2

These statistics for developing countries are consistent with the economic growth model. The countries with the lowest levels of real GDP per capita in 1960 had the highest growth rates between 1960 and 2000. The countries with the highest levels of real GDP per capita had the lowest growth rates.