Question

What could explain why South​ Korea's gross domestic product​ (GDP) per capita increased so much faster since the 1970s than North​ Korea's GDP per​ capita?
A. Resource allocation in South Korea is done much more efficiently than in North Korea.
B. South Korea has been better able to solve the coordination and incentive problems.
C. South Korea has a market​ economy, while North Korea is a command economy.
D. All of the above.

Answer 1

Answer:

D

Explanation:

Per capita GDP measures the standard of living of the people in a country. The higher the Per capita GDP, the higher the standard of living

Per capita GDP = GDP / population

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year

South Korea operates a market economy compared with North Korea. A market economy leads to greater efficiency in production when compared with a command economy.

A market economy is an economy where production decisions are made by the forces of demand and supply. there is no intervention of the government in production decisions

Characteristics of a market economy

• Private ownership of means of production

• freedom of choice. Producers are free to produce what they desire

• competition among producers

• no government intervention.

A command economy is an economy where production decisions are made by the government.