Why one nation experiences economic growth and another doesn’t is a question that has intrigued economists since Adam Smith wrote An Inquiry into the Nature and Causes of the Wealth of Nations in 1776. Explain why each of the following would limit economic growth.
a. The politically connected elite secure a large share of a country’s output and put the proceeds in Swiss banks.
b. A country has a very low output per person.
c. The national philosophy is live for the moment and forget about tomorrow.
d. The government closes all of the schools so more people will be available for work.
e. The country fears military invasion and spends half of its income on military goods.