In: Operations Management
Which of the following statements does NOT describe the geography theory?
A. Access to international trade is one of the key factors behind a country's long-run economic performance.
B. Aspects of a country's physical environment determine its long-run economic performance.
C. The more temperate regions of Europe, which could support agricultural innovations, would do better than tropical zones with unfriendly weather, an absence of easily domesticated large animal species, and the presence of serious diseases.
D. Because more favorable geography leads to higher income and, through higher income, to a better institutionalenvironment, the geography theory encompasses the theory of institutions of government.
Answers A is incorrect.
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According to the proponents favoring the institutions of government as the decisive factor,
A. the success of government in protecting private property rights is a key to economic growth.
B. the lack of instrumental variables measuring institutional quality is not a major critics against the theory as the case ofChina's institutional reform efforts has shown.
C. the negative association between lower corruption and higher per-capita income has demonstrated a clear proof for the theory.
D. the statistical evidence shown by the effect of mortality rat on the institutions governing property rights is sufficient to disprove the theory.
Answers A is incorrect.
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What is a good reason to focus on GDP per capita rates and growth rates?
A. These statistics are correlated with other meaningful variables such as life expectancy.
B. They help demonstrate the similar economic situations of all countries, despite large differences in country size.
C. They are a good measure of the worldwide economic importance of a nation.
D. There is no good reason, they are meaningless statistics.
Answers C is incorrect.
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Which is NOT a likely consequence of a developing country's decision to reduce trade restrictions such as import tariffs regarding its ability to borrow in the world capital market?
A. By making the economy more open to trade, liberalization is likely to enhance a developing country's ability to borrow abroad.
B. Less government interventions imply an increased penalty for default, which will further intimidate potential lenders to provide capital to the country as a whole.
C. Making the economy more open to trade will lead prospective lenders to expect a higher export level and an increased ability to service its debts in the future.
D. Combined with a set of policies which international lenders consider sound, the decision will improve lenders' assessment of the country's credit-worthiness.
Answers A is incorrect.
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Operations Management
Which of the following statements does NOT describe the geography theory?
B. Aspects of a country's physical environment determine its long-run economic performance.
According to the proponents favoring the institutions of government as the decisive factor,
B. the lack of instrumental variables measuring institutional quality is not a major critics against the theory as the case ofChina's institutional reform efforts has shown.
What is a good reason to focus on GDP per capita rates and growth rates?
D. There is no good reason, they are meaningless statistics.
Which is NOT a likely consequence of a developing country's decision to reduce trade restrictions such as import tariffs regarding its ability to borrow in the world capital market?
B. Less government interventions imply an increased penalty for default, which will further intimidate potential lenders to provide capital to the country as a whole.