Reference no: EM131095921

Two students, Ryan Wattenberg and Emma Bennett, are discussing the idea of convergence over coffee. Ryan considers convergence to be true in theory but impractical in the real world. He claims that most low-income developing countries are stuck in a cycle of poverty and so cannot catch up with developed countries. With increased globalization, Emma feels that the developing countries are growing and will converge with higher-income countries eventually. Zoey Smith, a friend of theirs, however thinks that the evidence on convergence is rather unclear. Despite the fact that developing countries are growing much faster than the developed countries, she thinks that they will not be able to catch up with the developed nations in the near future. Which of the following, if true, would strengthen Emma's argument that developing countries will not catch up with developed countries? A.Most developing nations are the pointwhere the cost ofcapital exceeds themarginal product of capital. B. The number ofbilateral and multilateral agreement relating to technology transfer from developed to developing nations has significantly increased. C. With low public investment in healthcare, the cost of private healthcare as a proportion of average income is very high in developing. D. since cash flows from foreign sources are considered volatile,many developing countries have capital controls and other regulations that restrict the flow of foreign investment. E. Unlike the developed nations, most developing countries do not have extensive government sponsored social security programs.