Consider two economies: Economy A and Economy B.Economy A is located close to the equator and is characterized by an extreme climate.The terrain in Economy A is inhospitable,and it lacks rivers or other bodies of water in its territory.In contrast,Economy B is located in the temperate zone with a pleasant climate,fertile soil,and navigable rivers.Suppose the geography hypothesis of economic growth holds true for these economies.
a)Which of the two economies is likely to be more prosperous?
b)Is the difference in prosperity between the two economies likely to be sustained in the long run?

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The Answer of Consider two economies: Economy A and Economy B.Economy A is located close to the equator and is characterized by an extreme climate.The terrain in Economy A is inhospitable,and it lacks rivers or other bodies of water in its territory.In contrast,Economy B is located in the temperate zone with a pleasant climate,fertile soil,and navigable rivers.Suppose the geography hypothesis of economic growth holds true for these economies.
a)Which of the two economies is likely to be more prosperous?
b)Is the difference in prosperity between the two economies likely to be sustained in the long run?

Consider Two Economies: Economy a and Economy B