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Chapter 22: Q2RQ (page 456)

Question. True or False: A DVC that has little in the way of natural resources is destined to remain poor.

Short Answer

Expert verified

The statement is false.

Step by step solution

01

Natural resource

Natural resources refer to those resources which a nation has due to its geographical or demographical advantage. These are resources that are present naturally and are not a result of human action; for example, minerals, water resources, and others.

02

Reason for the statement being false

The availability of natural resources is a factor that influences the economic growth of a nation. The better availability of natural resources can help accelerate economic growth, but the lack of availability of natural resources won’t make a country remain in the cycle of poverty.

In a world of free trade and open markets, those countries that lack the availability of natural resources will hire out it from other countries and find a solution to their issue. Japan is an example of this, which has achieved economic growth with limited resources.

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Most popular questions from this chapter

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.

Do you favor debt forgiveness to all DVCs typically, just the process ones, or none at all? What incentives problem might debt relief create? Would you be willing to pay \(20 a year more in personal income taxes for debt forgiveness? How about \)200? How about $2000?

What types of products do DVCs typically export? How do those exports relate to the law of comparative advantage? How do tariffs by IACs reduce DVC's standard of living?

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

Question. A DVC’s population is growing 2 percent per year and output is growing 3 percent per year. If the government wants to improve living standards over coming decades, which of the following would probably be the best savings rate for the economy?

a. 2 percent.

b. 0 percent.

c. 10 percent.

d. 5 percent.
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