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

question 175

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.
• 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.

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Definitions:

Fixed Cost

Expenses that do not change with the level of goods or services produced over a short period, such as rent or salaries.

Attractive Location

A site or place deemed desirable for setting up businesses or operations due to factors such as low costs, strategic position, or access to resources.

Fixed Cost

Expenses that do not change with the level of goods or services produced, such as rent, salaries, or loan payments.

Variable Cost

Costs that vary directly with the level of production or service activity, such as materials or labor costs.