Question

Which of the following statements draws a false conclusion? a. Nations that currently produce no capital goods, and whose inhabitants are hungry, risk famine with internally funded capital investments. b. Some African nations have substantially more food and capital investment than others; therefore, their standard of living is higher. c. Life expectancy in an average African country is lower than in an average European country; therefore Europeans can expect to outlive Africans. O d. Population reduction policies, if effective, can improve the nation's wealth by increasing real per capita GDP.

Answer 1

Answer) Option A is the correct answer. If nation is poor and it's inhabitants are hungry. Then it doesn't imply that internally funded capital investment would cost famines. For example, during 1970s china faced the same situations as mentioned above. But with the help of cultural revolution and great leap forward in manufacturing, China became a manufacturing hub. Thereby significantly reducing the level of poverty prevailing in the nation.