Convergence refers to the hypothesis that:

Name: Convergence refers to the hypothesis that:
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Question

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Convergence theory suggests that poorer countries will catch up with richer countries due to the diminishing returns of capital. As poorer countries have less capital stock available, each additional unit of investment has a higher marginal return. This means that, as long as they are investing efficiently and effectively, they will grow at a faster rate than richer countries with more capital stock.

Convergence Refers to the Hypothesis That