Economic Growth

1. How might multinational corporations that establish facilities in developing countries help break the vicious cycle of poverty in these countries? Does this always happen? 

2. In 2013/14 around 16% of Australia’s total overseas aid was designed for the development of governance. Why does the Australian government believe that governance is important in economic development of poor countries? 

3. Why might some people in high-income countries be more concerned with certain negative consequences of rapid economic growth than people in low-income countries? 

Unemployment and Inflation

1. Discuss the likely impact of each of the following on the unemployment rate: 

i. The lengths of time workers are eligible to receive unemployment benefit payments double. 

ii. The minimum wage is abolished. 

iii. Most workers join trade unions. 

iv. Many companies make information on job openings easily available on internet job sites. 

2. During the 1990s, Japan experienced period of deflation and low nominal interest rates that approach zero per cent. Why would lenders of funds agree to a nominal 

interest rate of almost zero percent? (Hint: were real interest rates in Japan also low during this period?