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How did foreign debt arise?
Evaluation: Borrowing shows an injection of new resources in the domestic economy and also an opportunity for development.
• When borrowed resources are used to raise productive capacity, in that case the loan and interest repayments can be met through economic growth.
• When the loan is used to finance current account deficits in that case there is no net investment as well as future economic growth. Debt is a burden.
The values for the long-run ATC curves of three different firms are listed in the table below: Quantity ATC 1 ATC 2 ATC 3
purely competitive firms increase total revenue by
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What is the argument of advocates of World Bank in promotion of development? Advocates of the World Bank argue: • Loans and aid alone don’t guarantee development or the
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