Chapter 38, Problem 4MCQ

To determine

To find: Factor that prevents long-run economic growth in country A.

Answer to Problem 4MCQ

Option E is correct.

Explanation of Solution

Option A

Political instability in Africa had caused lack of investment, poorer economic growth in country A. As people did not trust the government, this has resulted in lack of growth in the economy.

Option B

Lack of property rights

Property rights are defined when there is a proper legal system. Due to lack of effective legal system, people could not exercise property rights, thereby leading to lack of economic growth.

Option C

Unfavorable geographic conditions in country A, particularly in sub Saharan Africa has led to low economic growth. Extreme high temperature and lack of cultivation has led to poor economic growth.

Option D

Poor health

Lack of medicines, health facilities, unfavorable leadership and management has made poor growth in Africa.

Option E is correct.

Economics Concept Introduction

Economic growth is the increase in level of aggregate production of an economy which is manifested in national income. It shows the growth of production of goods and services over a year.