Some economists in the 1950s predicted that the Soviet Union would continue to grow faster than the United States for decades to come because
Part A.
A. in the 1950s, the Soviet Union was investing a very large amount in capital accumulation
B. in the 1950s, the Soviet Union was investing a very large amount in training its labor force
C. in the 1950s, the Soviet Union was investing a very large amount in acquiring knowledge capital
D. in the 1950s, the Soviet Union was investing a very large amount in acquiring new technologies
Part B.
This prediction turned out to be wrong because
A. there was a big workers' strike and the factories were closed for a long time
B. the government increased taxes imposed on businesses, which proved to be a major drawback for economic growth
C. the Soviet Union was engaged in a war with Afghanistan, so most of government spending was on the war
D. there were diminishing returns to capital, so after some time growth slowed down
Answer: Part A
A. in the 1950s, the Soviet Union was investing a very large amount in capital accumulation
Answer: Part B
D. there were diminishing returns to capital, so after some time growth slowed down