What might explain why in some lower-income nations, such as Mexico, there are low levels of capital inflows?
A) the reluctance of the government to allow higher levels of capital inflows
B) the low return on capital
C) the existence of different production functions, which would indicate a lower marginal product of capital
D) identical production functions but other constraints on capital transfers

Question

Quizplus · Accepted Answer

In some lower-income nations, different production functions can lead to a lower marginal product of capital, making these countries less attractive for capital inflows.

What Might Explain Why in Some Lower-Income Nations, Such as Mexico