Author Question: In the African nation of Senegal, to enroll in school a child needs a Birth Certificate that costs ... (Read 40 times)

erika · **on:** Jun 29, 2018

In the African nation of Senegal, to enroll in school a child needs a Birth Certificate that costs 25 . This price is several weeks' income for many families. Explain how this requirement is likely to affect the growth of human capital in Senegal.

What will be an ideal response?

Question 2

During the 1990s, Japan experienced periods of deflation and very low nominal interest rates, approaching zero percent. Why would lenders of money agree to a nominal interest rate of almost zero?

What will be an ideal response?

kristenb95 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

Human capital growth depends, in part, on the extent of school-ing: More schooling means more human capital. Because of Senegal's hefty fee for a required Birth Certificate, fewer children will enroll in school, thereby decreasing Senegal's human capital growth.

Answer to Question 2

With the deflation, the real interest rate exceeded the nominal interest rate. Lenders were making their decisions based on the higher real interest rate, not the very low nominal interest rate.