Trusted by Students Everywhere
Why Choose Us?
0% AI Guarantee

Human-written only.

24/7 Support

Anytime, anywhere.

Plagiarism Free

100% Original.

Expert Tutors

Masters & PhDs.

100% Confidential

Your privacy matters.

On-Time Delivery

Never miss a deadline.

The catch-up effect refers to the fact that a

Economics Dec 14, 2020

The catch-up effect refers to the fact that

a. an increase in the saving rate leads to higher growth only for a while.

b. it is easier for a country to grow fast if it starts out relatively poor.

c. because capital is a produced factor of production, a society can change the amount of capital it has.

d. today, thanks to advances in farming technology, a small fraction of the population can produce enough food to feed the entire country.

Expert Solution

The catch-up effect refers to the fact that b. it is easier for a country to grow fast if it starts out relatively poor .

Since relatively poor countries grow at a much faster rate than the rich countries. Therefore, all countries tend to converge at the same level of per capita income. It is because as compared with the rich countries, poor countries have more availability of opportunities for growth as they are given prepared and experimented technologies and application of technology by the rich countries. They generally copy the production methods from other developed countries which would cost them the least cost of research and development. Hence, they act as free-rider on the discoveries of other nations. As a result, they get successful as to converge with the per capita income of other countries.

Archived Solution
Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In
Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution
Get Custom Quote
Secure Payment