Other things equal,how do relatively poor countries tend to grow?
A) They grow slower than relatively rich countries; this is called the poverty trap.
B) They grow slower than relatively rich countries; this is called the Malthus effect.
C) They grow faster than relatively rich countries; this is called the catch-up effect.
D) They grow faster than relatively rich countries; this is called the constant-returns-to-scale effect.

Question

Quizplus · Accepted Answer

Relatively poor countries tend to grow faster than relatively rich countries due to the catch-up effect. This is because they can adopt technologies and practices already developed by richer countries, and also benefit from the potential for higher returns on capital investment in less developed economies. This effect can eventually slow down as countries reach the technological frontier, but in the short term, it can lead to relatively rapid growth.

Other Things Equal,how Do Relatively Poor Countries Tend to Grow