Consider two countries: A and B. Assume that both countries are exactly similar
ID: 1108174 • Letter: C
Question
Consider two countries: A and B. Assume that both countries are exactly similar until the year 2000. At the beginning of year 2000, both countries decide to change their strategy for economic growth. Country A plans to encourage immigration and increase human capital in the economy to achieve sustained growth, while Country B decides to make large investments in research and development to achieve sustained growth. Which of the two countries is more likely to experience sustained growth and why?
Explanation / Answer
Answer : No doubt that country A will experience sustained growth. Because if the human capital of a country grow then automatically economic growth rate will increase. Human capital index include literacy rate, life expectancy which indicate the welfare of country. Thus country A will sustained growth experience by investing on human capital while country B will less experienced sustained growth than country A.