Which of the following statements draws a false conclusion?
a. Life expectancy in an average African country is lower than in an average European country; therefore Europeans can expect to outlive Africans.
b. Nations that currently produce no capital goods, and whose inhabitants are hungry, risk famine with internally funded capital investments.
c. Some African nations have substantially more food and capital investment than others; therefore, their standard of living is higher.
d. Population reduction policies, if effective, can improve the nation's wealth by increasing real per capita GDP.
e. The vicious circle of poverty argument states that poverty precludes capital investment and that no capital investment perpetuates poverty.
c
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A decrease in the capital gains tax on income made from new capital investment will:
A. shift the supply of saving curve to the right. B. shift the demand for investment curve to the left. C. shift the supply of saving curve to the left. D. shift the demand for investment curve to the right.
A fall in the price level brings a ________ in the real wage rate that ________ profits and can lead to ________
A) fall; decreases; new firms entering business B) rise; reduces; firms going out of business C) rise; reduces; new firms entering business D) fall; increases; firms going out of business E) rise; increases; new firms entering business
A bank that mismatches its asset and liability maturities is
A) trying to reduce credit risk. B) willingly accepting greater credit risk. C) essentially engaging in interest-rate speculation. D) trying to protect itself against interest rate movements.
Deflation can cause widespread bank crises for all of the following reasons except:
A. information asymmetry problems decrease during deflationary periods. B. borrowers' default rates increase. C. bank balance sheets deteriorate as the level of economic activity decreases. D. a decline in the value of borrowers' net worth but not their liabilities.