ECON QUESTION.. Please help?

Question

Why is the fear of expropriation an obstacle to economic growth?

a. Because of the lack of guarantees, no foreign investment comes to the country.

b. Large government spending causes negative externalities. c. Because with a lack of research and development, no technological advances can be made.

d. Powerful special interest groups have the control.

e. Because of this fear, too many resources are devoted to military spending, a highly unproductive sector.

For domestic saving to occur, it is necessary to have

a. a high amount of government subsidies.

b. a high-income economy.

c. a highly developed banking system.

d. a stable system of property rights.

e. a strongly developed education system.

In many less-developed countries, per capita GDP falls even though output is rising because

a. exports exceed output for the domestic market. b. production is growing at a slower rate than the population. c. consumption spending exceeds investment spending. d. inflat

Answer 1

Not sure about 1

number 2 ) for saving to occure income>spending....so B

Number 3) D

Answer 2

For 1, a. is the most likely answer given the theme of the questionnaire, macro-economics and development — but e. would not completely absurd on another context, like Law & Economics; c. is not out of line either in an intellectual property course.

For 2, you actually need all of those (but a.); c. is probably the first and most necessary condition, and the one your teacher has in mind; d. echoes the previous question, and could be relevant too; e. is actually important: rationality and more specifically the ability to forecast the future (increased by education) boost savings; b. is useful too — although I never heard of that notion in economics.

For 3, b. sounds like the most reasonable option. The other option would most likely impact *future* GDP, not the current one.