Question #27
Reading: Reading 6 Economic Growth
PDF File: Reading 6 Economic Growth.pdf
Page: 13
Status: Unattempted
Question
Which of the following factors is most likely to contribute to a failure of the conditional convergence hypothesis?
Answer Choices:
A. Political stability
B. Regulatory policies that encourage investment
C. Low rates of savings
Explanation
Conditional convergence means that convergence is conditional on the countries having
the same saving rate, population growth rate, and production function. Low rates of
savings is one factor that can cause a developing country to fail to converge.