Question

Two students, Ryan Wattenberg and Emma Bennett, are discussing the idea of convergence over coffee. Ryan considers convergence to be true in theory but impractical in the real world. He claims that most low-income developing countries are stuck in a cycle of poverty and so cannot catch up with developed countries. With increased globalization, Emma feels that the developing countries are growing and will converge with higher-income countries eventually. Zoey Smith, a friend of theirs, however thinks that the evidence on convergence is rather unclear. Despite the fact that developing countries are growing much faster than the developed countries, she thinks that they will not be able to catch up with the developed nations in the near future.
Which of the following, if true, would strengthen Ryan's argument that developing countries will not catch up with developed countries?

a. Most developed countries do not have similar resources endowments.

b. Some of the fastest growing developing countries in the world also score well on many social indicators.

c. Credit creation by the formal banking system in most developing countries has been falling or stagnant in the last five years.

d. High population in developing countries, which for decades acted as a drag on growth, now forms a productive workforce.

e. Most developed countries experienced a high degree of inequality in the initial phases of economic growth.

Answer 1

Answer: Most developed countries experienced a high degree of inequality in the initial phases of economic growth.

Explanation:

Ryan's argument that developing countries will not meet up with the developed countries will be strengthed due to the high degree of inequality between developing countries and developed countries and also, because most developing countries are still in their early stage of economic growth.

There is a high degree of inequality that exist between developing and developed countries due to disparity in income, infrastructure, technological advancement, better health and educational sector. All these results in inequalities.

Developing countries usually have poor infrastructural facilities, poor health sector coupled with a poor functioning educational sector. For an economy to grow and develop, all these must function effectively and efficiently.