Which of the following does not contribute to the explanation why some countries have not experienced relatively high growth rates in real GDP per capita despite relatively low initial levels of real GDP per capita?
A)Many of these developing countries do not have a functioning court system that can enforce laws.
B)Countries that are relatively poor are more likely to experience wars and revolutions.
C)Countries that are relatively poor are likely to have a lower quality of health care and education.
D)Countries that are relatively poor are more likely to have higher savings.
E)Countries that are relatively poor or more likely to have free trade agreements with wealthy countries.

Question

Quizplus · Accepted Answer

Higher savings may lead to less consumption and investment in the short term, which may result in lower growth rates in real GDP per capita despite low initial levels of real GDP per capita. However, in the long term, higher savings may lead to greater investment in physical and human capital, which may eventually result in higher growth rates. The other factors listed are all potential reasons why some countries have not experienced relatively high growth rates in real GDP per capita despite relatively low initial levels of real GDP per capita.

Which of the Following Does Not Contribute to the Explanation