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Chapter 18: Q.14 (page 414)

Consider Table 18-1. Based on the basic arithmetic of economic growth, what were the average annual rates of real GDP growth since 1990 for those nations experiencing positive rates of annual growth of per capita real GDP?

Short Answer

Expert verified

the average annual rates of real GDP growth since 1990for those nations experiencing positive rates of annual growth of per capita real GDP are shown in the table

Step by step solution

01

Given Information

GDP is the standard proportion of the worth added made through the development of labour and products in a country during a specific period. Accordingly, it additionally gauges the pay acquired from that creation or the aggregate sum spent on definite labour and products.

02

Explanation

the average annual rates of real GDP growth since1990 for those nations experiencing positive rates of annual growth of per capita real GDP are shown in the table

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Most popular questions from this chapter

Identify the key functions of the World Bank and the International Monetary Fund.

Identify which of the following situations currently faced by international investors are examples of adverse selection and which are examples of moral hazard.

aAmong the governments of several developing countries that are attempting to issue new bonds this year, it is certain that a few will fail to collect taxes to repay the bonds when they mature. It is difficult, however, for investors considering buying government bonds to predict which governments will experience this problem.

bForeign investors are contemplating purchasing stock in a company that, unknown to them, may have failed to properly establish legal ownership over a crucial capital resource.

c. Companies in a less developed nation have already issued bonds to finance the purchase of new capital goods. After receiving the funds from the bond issue, however, the company's managers pay themselves large bonuses instead.

dWhen the government of a developing nation received a bank loan three years ago, it ultimately repaid the loan but had to reschedule its payments after officials misused the funds for unworthy projects. Now the government, which still has many of the same officials, is trying to raise funds by issuing bonds to foreign investors, who must decide whether or not to purchase them.

Last year, \(100million in outstanding bank loans to a developing nation's government were not renewed, and the developing nation's government paid off \)50million in maturing government bonds that had been held by foreign residents. During that year, however, a new group of banks participated in a \(125million loan to help finance a major government construction project in the capital city. Domestic firms also issued \)50million in bonds and $75million in stocks to foreign investors. All of the stocks issued gave the foreign investors more than 10percent shares of the domestic firms.

a. What was gross foreign investment in this nation last year?

b. What was net foreign investment in this nation last year?

Suppose that a foreign resident is contemplating buying 5 per cent of the shares of a company based in a developing nation but is experiencing difficulty determining whether the firm is riskier than others in that country. What type of investment is this foreign resident considering, and what type of asymmetric information problem is he or she experiencing?

Why does the fact that population growth has ambiguous effects on real GDP growth complicate the Chinese government's efforts to accomplish its growth objective?
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