The Logic Behind the Catch-Up Effect Is That

question 106

Multiple Choice

The logic behind the catch-up effect is that

• A)workers in countries with low incomes will work more hours than workers in countries with high incomes.
• B)the capital stock in rich countries deteriorates at a higher rate because it already has a lot of capital.
• C)new capital adds more to production in a country that doesn't have much capital than in a country that already has much capital.
• D)None of the above is correct.

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Definitions:

Lower Inflation

A decrease in the rate at which the general level of prices for goods and services is rising.

Efficient Markets

A theory suggesting that all available information is already reflected in the prices of stocks and other securities, making it impossible to consistently achieve higher returns than the overall market.

Informed Citizen

An individual who is knowledgeable about societal, political, and economic issues, enabling them to participate effectively in public life.

Microeconomics

The branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of limited resources.