Country A and country B are the same except country A has a capital stock of 5,000 a population of 12,000 and employment of 10,000. Country B has a capital stock of 8,000 and a population of 24,000 and employment of 20,000.
A)Country A has a higher standard of living and country B will not catch up.
B)Country A has a higher standard of living but country B will catch up.
C)Country B has a higher standard of living and country A will not catch up.
D)Country B has a higher standard of living but country A will catch up.

Question

Quizplus · Accepted Answer

Country A has a higher capital-to-labor ratio (5000/10000 = 0.5) compared to Country B (8000/20000 = 0.4), indicating a higher standard of living. However, Country B has the potential to catch up due to its larger population and employment base, which can lead to higher economic growth and capital accumulation over time.

Country a and Country B Are the Same Except Country