Why do developing nations often have low labor productivity? Are the workers just lazy?
What will be an ideal response?
Laziness is a loaded term that explains little about low labor productivity. Labor productivity is directly affected by the amount of physical capital available to workers and the level of human capital (education, health) in the work force. DVC lack both physical and human capitals that enable workers to produce more output per worker. Furthermore, highly skilled and productive workers may opt to leave a DVC and seek employment in an IAC. This brain drain contributes to the productivity problem in DVC.
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When the LM curve is horizontal,
A) fiscal policy has no impact on equilibrium income. B) fiscal policy has no impact on the equilibrium interest rate. C) the economy is at full employment. D) monetary policy has no impact on equilibrium income.
To an economist, an increase in demand means the same thing as an increase in quantity demanded
Indicate whether the statement is true or false