Many countries find it difficult to achieve economic growth. This is because economic growth
A) is not understood well by economists, so it is difficult to advise policy makers on the best policies to pursue.
B) requires saving, and saving means less consumption today. A poor country may find it difficult to consume less today.
C) appears to be predetermined and not subject to factors that policy makers can have any affect on.
D) depends on technological change and technological change depends on noneconomic factors such as the growth rate of scientific knowledge.

Question

Quizplus · Accepted Answer

Economic growth typically requires saving, investment, and productive capacity, which may mean reduced consumption in the present. However, in many poor countries, people already consume at subsistence levels, so it may be difficult to ask them to consume even less in order to save and invest for growth. This presents a challenge for policymakers seeking to promote economic growth.

Many Countries Find It Difficult to Achieve Economic Growth