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The catch-up effect can help explain:

A. The spectacular economic growth experienced by South Korea over the years 1960 to 1990.
B. The spectacular economic growth experienced by the United States over the years 1960 to 1990.
C. Why the World Bank is more inclined to encourage the flow of capital to advanced economies rather than to developing economies.
D. Why the diminishing-returns property is no longer taken seriously by economists.



Answer :

GinnyAnswer

Final answer:

The catch-up effect explains South Korea's rapid economic growth through investments in human capital, technology, and physical capital.


Explanation:

The catch-up effect can help explain the spectacular economic growth experienced by South Korea over the years 1960 to 1990. South Korea's rapid growth was fueled by investments in human capital, technology, and physical capital, leading to significant increases in GDP per capita.

Growth accounting studies have shown that the combination of investing in physical and human capital, along with advancements in technology, played a crucial role in South Korea's economic development.

Trade surpluses in the mid-1980s to mid-1990s allowed South Korea to repay past borrowing by sending capital abroad, showcasing the successful economic growth strategy implemented by the country.


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