Author Question: The economic growth model predicts that A) GDP per capita of poor countries will grow more ... (Read 93 times)

tuffie · **on:** Jun 29, 2018

The economic growth model predicts that

A) GDP per capita of poor countries will grow more rapidly than in rich countries.
B) GDP per capita of poor countries will never change.
C) Governments must centrally direct the economy for growth to occur.
D) GDP per capita of rich countries will grow more rapidly than in poor countries.

Question 2

Critically evaluate the following statement. If a country can produce a good using fewer inputs than other country then that means that country enjoys a comparative advantage.

What will be an ideal response?

paavo · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

A

Answer to Question 2

This is not true. What is being described here is an absolute advantage. In order to have a comparative advantage all that is needed is that a country produce the good with a lower opportunity cost but not necessarily with fewer inputs.