Chapter 7: Poor countries in a rich world

Question 1

Why is it better to be poor in a rich country than rich in a poor country?

Answer 1

Because on average even someone who is poor in a rich country makes 3 times more than a rich person in a poor country.

Question 2

What causes poverty?

Answer 2

Primarily: low productivity and when labor cannot adequately provide for one’s basic needs, let alone education, technology, credit, etc.

Question 3

Why did the US, a resource rich country, industrialize when it could have remained a production-based country?

Answer 3

By fostering broader-based institutions and enacting import tariffs instead of focusing only on production.