Economics with higher growth rates tend to be those that _____.
a. have large amounts of natural resources.
b. have a stable government that protects property rights.
c. have high levels of government regulation.
d. have all of the above.
and….
The convergence hypothesis helps explain why ______.
a. highlt educated people converge in high-income countries.
b. high-income individuals marry other high-income individuals.
c. high-income countries continue their high growth rates.
d. high-income countries tend to have slower growth rates compared to lower-income countries.
I WILL award 10 points to the one who can help me on these. I would appreciate it very much, and thanks everyone.
✅ Answers
? Best Answer
In regards to the first question, even though high regulation and natural resources sometimes contribute to growth, quite often countries that do not have these experience high growth. For example look at China and India. Even though both do have substantial natural resources, neither have nearly as much as say Russia, Australia or numerous middle Eastern countries, so you wouldn’t really call them high in natural resources. Countries with high growth do not have a tendency to have large amounts of natural resources.
– Chosen by Asker
1. d. all of the above
—-large amounts of natural resources allow for many things like timber, wood, metals, water, fuels, coal, oil, etc. All of these resources will help the economy to be totally self-sufficient with little or no dependence on a foreign economy. A good example is when we use to produce all the oil and gas we consumed and imported none of it.
——any government that is stable will have a higher growth rate such as a GDP that is increasing. A stable government won’t have recessions and depressions. The protection of property rights is absolutely necessary; especially when it comes to the growth of private business. Real Property rights protection is a perfect example which our country practices. Patents, copyrights and inventions are examples of protected property rights as well as Real Estate owned by a business that protects them from any other business entry this ReaL Estate.
—–Government regulation is also a necessity when it’s for the protection of the individual or common person. A perfect example of this is the government regulation of our utility and telephone companies. These regulations protect us from price fixing and monopolies. Antitrust legislation is also an excellent example since it protects from monopolies by certain companies in an industry or an oligopoly which is the same as a monopoly but with a few companies in one specific industry rather than just one company.
2. d. higher-income countries tend to have slower growth rate compared to lower-income countries.
—Convergence hypothesis states that the marginal product of capital relative to labor is higher in a poor country than it is in a rich one. This means that the labor force in a poor country is producing more relative capital than a rich one. In other words, the capital is increasing faster in a poor country because their product margin is higher. This results in a higher growth rate or a larger marginal increase in GDP. The capital, per person, increases faster. They are both approaching the same end but since the richer country is closer to the end and it’s marginal increase of capital is less than the poor country; that means, that the poor countries are growing faster.
The poor country will become more industrialized as the marginal product of capital relative to labor will increase faster due to new technology and this margin will continue to be higher inn a poor country until they reach the same end.
Producing more capital marginally will cause a faster increase in growth until the poor countries reaches the level of the rich one. This margin is higher since the poor country is more labor intensive and the labor is now producing more capital. The technology of poor country will eventually equal that of the rich one.