Question

What is the catch‑up effect concerning developed and developing countries? Developing countries never can catch up to developed countries. may grow faster than developed countries because they lack the most basic tools and capital investment leads to higher productivity growth. have greater productivity per unit of capital because they are better at developing new technologies. Developing countries have lower productivity per unit of capital because they are better at developing new technology.

Answer 1

Developing countries may grow faster than developed countries because they lack the most basic tools and capital investment leads to higher productivity growth.

Step-by-step explanation:

The catch‑up effect concerning developed and developing countries is that "Developing countries may grow faster than developed countries because they lack the most basic tools and capital investment leads to higher productivity growth."

This is based on the theory that the law of diminishing marginal returns will at some point occurred to the rate or level of investment at the national level, thereby leading to a slow-down effect on growth rates as the economy of a country matures.