The lack of capital in developing nations causes
A) labor productivity to remain low.
B) the savings rate to be too high.
C) output to be low in the present but high in the future.
D) consumption rates to be too high.

Question

Quizplus · Accepted Answer

The lack of capital in developing nations means there are fewer resources for investment in the tools, machinery, and infrastructure that can make labor more productive. Without these investments, workers cannot produce as much per hour worked, keeping labor productivity low.

The Lack of Capital in Developing Nations Causes