The IMF has pointed out that the fast growing economies of Asia face the risk of falling into 'middle-income trap'. It means that average incomes in these countries, which till now have been growing rapidly, will stop growing beyond a point—a point that is well short of incomes in the developed West. The IMF identifies a number of causes of middle-income trap—none of which is surprising—from infrastructure to weak institutions, to less than favourable macroeconomic conditions. But the broad, overall cause, says IMF, is a collapse in the growth of productivity.

Which among the following is the most logical, rational and critical inference that can be made from the above passage?

Question

The IMF has pointed out that the fast growing economies of Asia face the risk of falling into 'middle-income trap'. It means that average incomes in these countries, which till now have been growing rapidly, will stop growing beyond a point—a point that is well short of incomes in the developed West. The IMF identifies a number of causes of middle-income trap—none of which is surprising—from infrastructure to weak institutions, to less than favourable macroeconomic conditions. But the broad, overall cause, says IMF, is a collapse in the growth of productivity.

Which among the following is the most logical, rational and critical inference that can be made from the above passage?

Accepted Answer

Once a country reaches middle-income stage, it runs the risk of falling productivity which leads to stagnant incomes.

Answer

Falling into middle-income trap is a general characteristic of fast growing economies.

Answer

There is no hope at all for emerging Asian economies to sustain the growth momentum.

Answer

As regards growth of productivity, the performance of Asian economies is not satisfactory.

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