Economics: Private and Public Choice (MindTap Course List)
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 16, Problem 2CQ
To determine

Explain the source of the economic growth and the achievement of high-income level.

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which is most important to economic development—culture, geography, or institutions?
Some resource-rich countries have succeeded in converting resource wealth into longterm and equitable economic development, while many others have not. Natural resources have played a fundamental role in the growth of several industrialized economies, including Germany and the United Kingdom, where coal and iron ore deposits were a precondition for the Industrial Revolution. The United States was the world’s leading mineral economy from the mid-nineteenth to the mid-twentieth century and in the same period became the world’s leader in manufacturing (van der Ploeg 2011). More recently, countries such as Botswana, Chile, and Norway have used abundant oil and mineral resources as the foundation for economic growth. Discuss in depth, based on your understanding of the various sources of fiscal risks what complicates fiscal management in resource rich countries. Taking Zambia as a case study, suggest ways in which these risks can be managed.
Draw a production possibilities frontier for a country that produces two goods: capital goods and consumption goods. Show a point of production that will allow a country to achieve the maximum amount of future growth while still producing a small amount of consumption goods.
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