Scenario: Two neighboring countries, Sweetland and Sourland, are identical in terms of size, population (800,000), education of workforce, and value of natural resources owned.
-Refer to the scenario above.Again,assume Sweetland has a higher GDP.If all inputs are the same,which of statements below could be responsible?
A) The relationship between efficiency units of labor and GDP may differ in the two countries.
B) The relationship between physical capital stock and GDP may differ in the two countries.
C) Technology may be more advanced in Sweetland.
D) All of the above.

Question

Quizplus · Accepted Answer

All of the options provided (A, B, and C) could explain why Sweetland has a higher GDP than Sourland, despite the two countries being identical in other respects. Differences in labor efficiency, physical capital stock, and technology levels can all impact a country's GDP.

Scenario: Two Neighboring Countries, Sweetland and Sourland, Are Identical in Terms