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berrytarts berrytarts
wrote...
Posts: 520
Rep: 5 0
6 years ago
Explain why the LDCs are unable to invest much in capital goods and human capital.

QUESTION 2

In a simplified banking system in which all banks are subject to a 10 percent required reserve ratio, a 1,000 open market sale by the Fed to a bank would cause the money supply to:
 a. increase by 1,000.
  b. increase by 100,000.
  c. decrease by 10,000.
  d. decrease by 1,000.
  e. remain unchanged.

QUESTION 3

Describe the vicious cycle of poverty. What are the consequences of this cycle?

QUESTION 4

Which of the following is in charge of the buying and selling of government securities by the Fed?
 a. The president. b. The Federal Open Market Committee.
  c. The Congress. d. None of these.

QUESTION 5

What role does population growth play in economic development?

QUESTION 6

If the Fed wishes to increase the money supply then it should:
 a. increase the required reserve ratio.
  b. increase the discount rate.
  c. buy government securities on the open market.
  d. do any of these.

QUESTION 7

Describe in general terms four or five characteristics of less-developed countries.

QUESTION 8

Decisions regarding purchases and sales of government securities by the Fed are made by the:
 a. Federal Deposit Insurance Commission (FDIC).
  b. Discount Committee (DC).
  c. Federal Open Market Committee (FOMC).
  d. Federal Funds Committee (FFC).
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wrote...
6 years ago
[Answer to ques. #1]  The demands of the growing populations in these countries force them to devote most of their resources to the production of consumption goods, and not enough to the production of capital goods or human capital.

[Answer to ques. #2]  c

[Answer to ques. #3]  The vicious cycle of poverty explains that the people in LDCs are poor because of a low level of investment in capital goods production, and the low level of investment is because the people are poor. The consequences are high infant mortality rates, low life expectancy, a low percentage of people using safe water, and a low percentage of school aged children in school.

[Answer to ques. #4]  b

[Answer to ques. #5]  Rapid population growth creates a high dependency ratio and requires substantial investment of resources in health, education, and training. These resources could alternatively have been invested in physical capital and infrastructure to promote the growth of GDP.

[Answer to ques. #6]  c

[Answer to ques. #7]  Less-developed countries have high populations and high birth and death rates, have low standards of living as measured by per capita GDP, and rely on technology and other needed inputs from the developed countries. More than half of their populations are engaged in agricultures where productivity is low. These countries make poor use of their labor and underemployment abounds. They have high illiteracy rates and a low percentage of their populations in school at any level. Life expectancy is low; people suffer from malnutrition and disease and have few health-care opportunities.

[Answer to ques. #8]  c
berrytarts Author
wrote...
6 years ago
Wow! Thanks you for this correct set of answers, wasn't expecting it...
wrote...
6 years ago
My pleasure!
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