The catch-up effect refers to the idea that

Question

a. it is easier for a country to grow fast and so catch-up if it starts out relatively poor.
b. population eventually catches-up with increased output.
c. if investment spending is low, increased saving will help investment to "catch-up."
d. saving will always catch-up with investment spending.

Answer 1

The catch-up effect refers to the idea that:

a. it is easier for a country to grow fast and so catch-up if it starts out relatively poor.

This concept suggests that poorer countries can grow at a faster rate than more developed countries because they can adopt existing technologies and practices rather than having to innovate from scratch.