Question

In: Operations Management

Which of the following statements does NOT describe the geography​ theory? A. Access to international trade...

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 institutional​environment, 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 of​China'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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Solutions

Expert Solution

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 of​China'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.


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