When poor nations cannot compete with rich nations to attract capital because of their lower overall productivity, it creates:
A) convergence.
B) long-run divergence.
C) externalities.
D) opportunities for cross-border investment.

Question

Quizplus · Accepted Answer

The situation described in the question is an example of long-run divergence, where poor nations are unable to catch up with rich nations due to their lower productivity. This can lead to further disparities in income and economic growth between these nations.

When Poor Nations Cannot Compete with Rich Nations to Attract