BCS Practice Test & Exam Prep | Bangladesh

Underdeveloped countries have no government sector, so G cannot appear in the income identity Underdeveloped countries have unlimited unused industrial capacity and no supply constraints Keynes assumed unemployed resources with elastic output response; many underdeveloped economies face structural supply bottlenecks, so extra demand may raise prices more than real output Saving is always equal to investment in underdeveloped countries, so the multiplier is zero