Why Do Small Differences in Economic Growth Rates Across Countries

question 51

Essay

Why do small differences in economic growth rates across countries have big impacts on the relative situations of the countries over decades of time?

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Definitions:

Comparative Advantage

The ability of a country or individual to produce a particular good or service at a lower opportunity cost than others.

Absolute Advantage

The capability of a country, individual, company, or region to produce a good or provide a service more efficiently than its competitors when using the same amount of resources.

Soybeans

A type of legume native to East Asia, widely grown for its edible bean which has numerous uses.

Alfalfa

A leguminous plant used primarily for feeding livestock, rich in nutrients and often grown as fodder.