Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 25, Problem 2QCMC
To determine
Comparison of GDP between rich and other countries.
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1. Haiti is one of the poorest countries in the world. Suppose you were asked to be an advisor to the policymakers of Haiti. Please briefly discuss two policies that you would recommend to them to promote economic development in their country.
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The Poorest Billion Not long ago, the world was one-sixth rich and five-sixths poor. Now, thanks to impressive growth in places like China, the world is more like one-sixth rich, two-thirds not rich but improving, and one-sixth poor and going nowhere. Most developing economies are experiencing a rising standard of living. But that still leaves about a billion people trapped in economies that are not only extremely poor, but stagnant or getting worse. All told, about 45 countries fit into this poorest-billion category, including 30 countries in sub-Saharan Africa plus the likes of Cambodia, Haiti, Laos, Myanmar, North Korea, and Yemen. Economist Paul Collier, of Oxford University in England, has examined what went wrong with these “trapped countries.” Based on decades of research, he identifies some poverty traps. About 750…
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Principles of Economics, 7th Edition (MindTap Course List)
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- In the diagram below, which of the following economies have a more equal income distribution? (a) Economy A. (b) Economy B. (c) Economy C. (d) More information is needed.arrow_forwardThe Importance of Productivity Two well-known economists, William Baumol and Alan Blinder, have stated that, in the long run, “nothing contributes more to reduction of poverty, to increases in leisure, and to the country’s ability to finance education, public health, environmental improvement and the arts” (1991, 356) than the rate of growth of productivity. 1. Define productivity. 2. See if you can verify Baumol and Blinder’s very strong claim (“nothing contributes more ...”) through the following exercise. Assume GDP in the United States is $10 trillion and that the labor force remains constant in size and fully employed. Estimate the value of GDP in one year’s time if productivity growth is 3%. What if it were only 2%? How much will GDP fall in two years’ time if productivity growth remains at 2% rather than 3%? In three years? 3. Why might environmental regulation reduce productivity growth? 4. Why might it increase…arrow_forwardWhat is likely to happen to income inequality in a developing country as it undergoes rapid industrialization? A. Income inequality will decrease significantly. B. Income inequality will remain the same. C. Income inequality will increase initially, but may decrease over time. D. Income inequality will increase and continue to rise indefinitely.arrow_forward
- Life in the Developing Nations: Population and Poverty 1.What is the distribution of the world's population between the developed nations and developing nations? What is the distribution of income between these two groups and their consumption as a percentage of world income? 2.Can the same principles that have been used in the study of advanced economies be used to study less developed economies as well? Explain your answer. 3.What are some of the issues that economists have to worry about when studying developing nations that are very different from those of advanced industrialized nations? 4.In the 1960 nations could be divided into three distinct groups. Discuss these three groups and offer examples of countries that fit into each of these categories. 5.Why is it that today it is more difficult to categorize countries into the three neat groups like the one that were used in the 1960s.arrow_forwardTell One Positive and normative statement about universal basic income in Canada in any article.arrow_forwardMust we have inequality for economic growth? A. Yes, disparities in income and wealth encourage hard work and saving. B. Yes, the richer individuals are in society, the more they can invest their capital in society and produce jobs for all. C. No, inequality stymies economic growth. More unequal nations grow less quickly than more equal societies - potentially due to speculative spending, and low healthcare outcomes and educational attainment for poorer people leading to less productivity. D. No, it is mean spirited and makes people dislike each other.arrow_forward
- Which is NOT causing the growth of slums, according to Mike Davis? Group of answer choices Lack of economic development in cities IMF structural adjustment programs Rising crime and drug abuse Growth of large-scale industrial agriculturearrow_forwardIn a capitalist economy, is income inequality necessary for economic growth?arrow_forwardWith all its natural resources, why does Africa remain the poorest continent in the worldarrow_forward
- 71.Improvements in nutrition and health care typically increase life expectancies and decrease mortality rates , but don't increase the rate of population growth . T Farrow_forwardWhy is income per person so much higher in some countries than others?arrow_forwardThe view of economic philosophy (economic philosophy) states that development is freedom (development is freedom) while poverty and inequality are approached from the capability approach. Critically explain this philosophical economics view of poverty-inequality and development.arrow_forward
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