The Catch-Up Effect Says That Countries with Low Income Can

question 61

Essay

The catch-up effect says that countries with low income can grow faster than countries with higher income. However, in statistical studies that include many diverse countries we do not observe the catch-up-effect unless we control for other variables that affect productivity. Considering the determinants of productivity, list and explain some things that would tend to prohibit or limit a poor country's ability to catch up with the rich ones.

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Definitions:

Sales Budget

An estimate of the expected total sales revenue and selling expenses of a company for a specific period, helping to plan financial activities.

Budgeted Volume

The predicted amount of work, sales, or production a company plans to achieve within a certain period, usually used for planning and performance evaluation.

Expected Sales

Projected revenue that a company anticipates earning from the sale of goods or services in a future period.

Ending Inventory

The total value of goods available for sale at the end of an accounting period.