Suppose that a Swiss watchmaker imports watch components from Sweden and exports watches to the United States. Also suppose the dollar depreciates, and the Swedish krona appreciates, relative to the Swiss franc. Speculate as to how each would hurt the Swiss watchmaker. LO20.3
Explain how each of the following can be obstacles to the growth of income per capita in the DVCs: lack of natural resources, large populations, low labor productivity, poor infrastructure, and capital flight. LO21.2
What factors cause failed states? List and discuss five policies that DVC governments might undertake to promote economic development and expansion of income per capita in their countries. LO21.4
To Do:
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