Why might a country experience a higher growth rate after a war? I. With a depleted, or destroyed, capital stock, any new capital would contribute greatly to growth. II. Capital accumulation always causes higher growth rates. III. A winning country may see its exports surge as it helps others rebuild leading to a higher growth rate.
A) I only
B) II and III only
C) I and III only
D) I, II, and III

Question

Quizplus · Accepted Answer

Option I is correct because after the war, a country has a depleted or destroyed capital stock, so any new capital would contribute significantly to growth. Option II is incorrect because capital accumulation does not always lead to higher growth rates. It depends on various factors like technology, human capital, and infrastructure. Option III is correct because a winning country may see its exports increase as it assists others in rebuilding, which leads to higher growth rates.

Why Might a Country Experience a Higher Growth Rate After