Once a country is wealthy,

Question

Quizplus · Accepted Answer

Once a country is wealthy and has accumulated enough capital, the additional marginal benefits of investing in more capital become smaller and smaller, resulting in diminishing returns to capital. Therefore, growth may slow down, making it harder for the country to continue to grow quickly. However, wealth does not prevent a country from needing human capital, and there is no evidence to support the idea that capital becomes more productive due to the "catch-up effect." While it is difficult for a wealthy country to become relatively poorer, it is not impossible due to factors such as economic shocks, changes in global demand, and poor economic policies. Therefore, options A, B, and E are not accurate.

Once a Country Is Wealthy