In the long run, expanding educational and training facilities, transportation and communication and other infrastructure in LDCs should increase ?
Correct answer: B. absorptive capacity
- A. productivity paradox
- B. absorptive capacity
- C. the residual
- D. uncertainly
Explanation
Education, training and infrastructure improve a developing economy’s ability to adopt, operate and benefit from new technology and capital. This ability to use incoming technology and investment effectively is called absorptive capacity.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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