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Chapter 22: 22-8DQ (page 456)

Do you think that the problems the DVCs face require a government-directed or a private-sector-directed development process? Explain your reasoning.

Short Answer

Expert verified

To foster growth and development, the DVCs should use the combined efforts of both the government and the private sectors.

Step by step solution

01

Government and Private Partnership

We see that if governments are often characterized by corruption and mismanagement, private sectors place their interest before the interest of the society. Therefore, to boost development and growth in the economy, it is best if both sectors work together. This way, the private sector will work efficiently, and management will be effective, whereas government will work for the welfare of the society.

Both the private sector and the government sector could play different roles, and together they can foster development. Say a private sector could take up the production process since it requires high management, and the government can take up distribution to ensure equality.

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Most popular questions from this chapter

Question. True or False. Economists are unanimous that foreign aid greatly helps DVCs

Question. Which of the following policies would economists consider to be actions by a DVC government that will improve growth prospects?

Choose one or more answers from the choices shown.

a. Helping to extend the banking system to the rural poor.

b. Passing high tariffs against foreign products.

c. Constructing better ports, roads, and Internet networks.

d. Charging high fees for public elementary schools.

Suppose a country’s total output is growing 10 percent per year, but its population is growing 11 percent per year. What will happen to living standards?

  1. Remain the same
  2. Fall
  3. Rise

Question. Assume a DVC and an IAC currently have real per capita outputs of \(500 and \)50,000, respectively. If both nations have a 3 percent increase in their real per capita outputs, by how much will the per capita output gap change?

True or False. Some economists argue that the single best thing that IACs could do for DVCs in terms of economic growth is to eliminate trade barriers between IACs and DVCs.
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