A country that starts with very little physical capital will receive a _______ return from adding a unit of capital than a country that _______.

Question

Quizplus · Accepted Answer

The law of diminishing returns suggests that a country with less initial physical capital will benefit more from adding a unit of capital than a country with more physical capital, as the initial productivity gains are larger when starting from a lower base.

A Country That Starts with Very Little Physical Capital Will