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1、Chapter8
2、WhyIsn'ttheWholeWorldDeveloped?103Chapter8WhyIsn'ttheWholeWorldDeveloped?Questions1.Whydosomecountrieshavemorephysicalcapital,higherqualityofhumancapital,andbettertechnology?Answer:Thesefavorablefactorsforeconomicgrowthareshapedbyfundamentalfactors,suchasgeography(i.e.,climateandecol
3、ogy),culture(i.e.,valuesandbeliefs)andinstitutions(i.e.,lawsandregulations).A-head:PROXIMATEVERSUSFUNDAMENTALCAUSESOFPROSPERITYConcept:Proximateandfundamentalcausesofprosperity2.Whatdoesthegeographyhypothesisstate?Answer:Thegeographyhypothesisstatesthatdifferencesingeography,climate,andecolog
4、yareultimatelyresponsibleforthedifferencesinprosperityobservedacrosstheworld.Accordingtothishypothesis,somecountrieshavehighlyunfavorablegeographical,climatic,orecologicalcircumstancesthatareoutsideoftheircontrol.Theseconditionsmakeitimpossibleorunlikelyforsuchcountriestoaccumulateoreffective
5、lyusethefactorsofproduction.A-head:PROXIMATEVERSUSFUNDAMENTALCAUSESOFPROSPERITYConcept:Thegeographyhypothesis3.Accordingtothegeographyhypothesis,whatcouldbedoneinordertoimproveincomesinpoorcountries?Explain.Answer:Ifgeographyisthemajorfundamentalbasisofprosperity,thenthepoornationsoftheworldh
6、avelittlereasontoexpectmuchimprovementinlivingstandards.Theyarepermanentlydisadvantagedandwouldnotbeexpectedtocatchupwiththerestoftheworldandbecomeeconomicallydevelopedanytimesoon.However,somevariationsofthegeographyhypothesisstipulatethatlarge-scaleinvestmentsintransporttechnologyordiseaseer
7、adicationmaypartiallyredressthesegeographicdisadvantages.A-head:PROXIMATEVERSUSFUNDAMENTALCAUSESOFPROSPERITYConcept:Thegeographyhypothesis4.Doyouthinkculturaldifferenceshelpexplaintheeconomicgrowthindifferentcountries?Giveanexampletoillustrateyouranswer.Answer:Theculturehypothesisclaimsthatdi
8、fferencesinvaluesandculturalbeliefsfundamentallycausethedifferencesinprosperityaroundtheworld.Forexample,SouthKoreagrewrapidlyinthetwentiethcenturyandGhanadidnot.Theformervaluedthrift,investment,hardwork,education,organizationanddiscipline,wh
