1. Consider two countries—A and B. Country A is characterized by a command economy, absence of property rights, high entry barriers for new businesses, and forced child labor. Country B, on the other hand, is characterized by well-defined private property rights, a developed market system, and no entry barriers for new businesses.
a) Which of the two countries is likely to oppose creative destruction more? b) Why?
2. Consider two countries: A and B. Assume that both countries are exactly similar to the year 2000. At the beginning of the year 2000, both countries decide to change their strategy for economic growth. Country A plans to encourage immigration and increase human capital in the economy to achieve sustained growth, while Country B decides to make significant investments in research and development to achieve sustained growth.
A) Which of the two countries is more likely to experience continued growth and why?