Macroeconomics + Economy 2009 Update 18th Edition by Campbell McConnell, Sean Masaki Flynn,Stanley Brue

Exercise 8

Discuss and evaluate:
a. The path to economic development has been blazed by American capitalism. It is up to the DVCs to follow that trail.
b. The problem with the DVCs is that income is too equally distributed. Economic inequality promotes saving, and saving is a prerequisite of investment. Therefore, greater inequality in the income distribution of the DVCs would be a spur to capital accumulation and growth.
c. The core of economic development involves changing human beings more than it does altering a nation's physical environment.
d. The U.S. "foreign aid" program is a sham. In reality it represents neocolonialism-a means by which the DVCs can be nominally free in a political sense but remain totally subservient in an economic sense.
e. The biggest obstacle facing poor nations in their quest for development is the lack of capital goods.