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

question 86

Multiple Choice

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 effect.
• B) They grow slower than relatively rich countries; this is called the savings 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 diluting capital effect.

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Definitions:

Tariffs And Quotas

Policies and restrictions that countries use to control the amount of goods coming into and going out of the country to protect domestic industries from foreign competition.

Lesser Of Two Evils

A principle that suggests choosing the option that is considered less harmful or less undesirable among two poor choices.

Foreign Imports

Products or services imported from other countries for the purpose of being sold.

Trade Deficit

A scenario in which a country spends more on importing goods than it makes from exporting them, creating a trade imbalance.