
What is the main reason that public-sector investment spending plays a larger role in developing countries than in industrial countries?
A) Most governments in developing countries are Communist.
B) Businesses of developing countries invest all their money abroad.
C) Hyperinflation prevents any private investment in developing countries.
D) There is a larger percentage of state-owned enterprises in developing countries.
E) Most developing countries suffer from large government deficits, which cause complete crowding out of private investment.
Correct Answer:
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