Developing countries can achieve higher productivity per unit of capital because they can use technologies developed by other countries. This is known as the

Question

Quizplus · Accepted Answer

The catch-up effect refers to the phenomenon where developing countries can achieve higher productivity per unit of capital by adopting technologies already developed by advanced countries. This allows them to avoid the costly trial-and-error process of developing new technologies and instead benefit from the experiences of others. Therefore, option C is the correct answer. Option A is incorrect because the increasing returns to capital effect refers to the situation where an increase in capital leads to a more than proportional increase in output. Option B is incorrect because the copycat effect does not specifically refer to the productive use of technology. Option D is too broad and does not specifically refer to the situation described in the question.

Developing Countries Can Achieve Higher Productivity Per Unit of Capital