What positive role can government play in fostering economic growth in developing countries?
What will be an ideal response?
Government can play a positive role in fostering growth in DVC because of conditions affecting economic growth in those nations. First, a strong and stable government is needed to establish and maintain law and order in some DVC because instability contributes to slow economic growth. Second, government action is vital for the creation of an adequate infrastructure, a feature lacking in most DVC. Third, DVC can use globalization to their advantage by opening markets to trade and investment and setting realistic exchange rates. Fourth, government programs should encourage education, and labor market skills to build human capital. Fifth, entrepreneurship is limited in DVC because of the risks facing entrepreneurs, so government can reduce business risk and take actions to stimulate growth. Sixth, government policies can expand access to credit through micro finance. Finally government can address the many social-institutional-cultural problems such as controlling population growth and making peace with neighbors.
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Exhibit 7-13 Price and cost per unit curves
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In Exhibit 7-13, the firm will not produce when the price is between:
A. zero and P2. B. P2 and P3. C. P3 and P4. D. P4 and P5.
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A. $100 million B. $33 million C. $667 million D. $66 million
The business cycle is the alternating periods of economic growth and contraction.
Answer the following statement(s) true (T) or false (F)