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mwit1967

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Question 1

An economy is not able to develop because of a lack of capital. Which of the following strategies would you suggest this economy pursue?


◦ lower interest rates
◦ impose quotas on how much capital can be imported from other countries to reduce dependency on foreign capital
◦ increase the political stability of the economy
◦ nationalize private enterprises because the government sector is not motivated by profit maximization

Question 2

A developing economy is considering restricting the amount of money its citizens can invest abroad. What might the purpose of this restriction be?


◦ to increase the dependency of the economy on developed economics
◦ to increase capital formation by forcing its citizens to invest in their own country
◦ to reduce the nation's trade deficit so that interest rates will be reduced and capital formation will increase
◦ to increase the degree of equality in the income distribution


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Marked as best answer by mwit1967 on Apr 19, 2019

epscape

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