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In this chapter, we will apply many of the concepts we have developed throughout the course to the problems of developing nations. We will first describe some of the conditions prevalent in developing nations, then we will apply some of the concepts we learned earlier about the sources of economic growth to strategies applicable for developing nations. We will then explore some of the differences between economic systems, principally market-based capitalism and centrally-planned socialism. Finally, we will look at the major transitions occurring in formerly socialist societies. Upon completion of this lecture, you should understand and be able to answer these key questions: 1. What is the difference between more-developed and less-developed nations? 2. What can less-developed countries do to improve their standards of living? 3. Is population growth good or bad for an economy? 4. Can countries get in trouble with their creditors? 5. What is the difference between capitalism, communism, and socialism? 6. What are the requirements for a successful transition to a market economy?
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