Assignment:
PART 1: Comparing Growth Rates
First, prepare yourself for the Assignment by reading the following three articles or webpages:
Professor Dave Alber's Lecture can be found in the Doc Sharing area of the course.
Abler, D. (n.d.) Notes for a Lecture on Economic conditions in developing countries. Copyright permission granted September 25, 2010.
Khan's (2001) article by going to the International Monetary Fund Website (see the Webliography).
Khan, M. H. (2001). Rural poverty in developing countries: Implications for public policy. Economic Issues NO. 26. International Monetary Fund. Retrieved July 6, 2012.
You can find the most up-to-date report on the World Bank website. (See Webliography).
The World Bank Group. (2012). Prospects for the Global Economy. Washington D.C.
After you have read the items listed above, access the "Data & Research" tab in the World Bank Website and compare growth rates between two countries of your choice. Specifically, select one developed country (such as U.S., England, Canada, Germany, etc.), and select one developing country (such as Angola, Bangladesh, Chad, Nigeria, etc.).
Find and transfer their 2007-2011 GDP growth (annual %) data into your Assignment. Identify and explain possible factors that may be adding to the differences between their GDP growth rates.
PART 2: Loanable Funds Market
Answer questions 1a and 1b:
1. Analyze each of the following changes in the market for loanable funds. Explain what happens to private savings, private investment spending, and the rate of interest if the following events occur. Assume the economy is closed (no transactions are made with foreign countries).
a. The government reduces the size of its deficit to zero.
b. At any given interest rate, consumers decide to save more. Assume the budget balance is zero.