Relating intertemporal production with biased current and future consumption of goods.
Which of the following countries would you expect to have intertemporal production possibilities biased toward current consumption goods, and which biased toward future consumption goods? Why?
a. A country, like Argentina or Canada i the last century, that has only recently been opened for large-scale settlement is receiving large inflows of immigrants.
b. A country, like the United Kingdom in the late nineteenth century or the United States today, that leads the world technologically but is seeing that lead eroded as other countries catch up.
c. A country that has discovered large oil reserves that can be exploited only with massive investment (like Norway, whose oil lies under the North Sea).
d. A country that has discovered large oil reserves that can be exploited with little new investment (like Saudi Arabia).
e. A country like South Korea that has discovered the knack of producing industrial goods and is rapidly gaining on advanced countries.© SolutionLibrary Inc. solutionlibary.com 9836dcf9d7 https://solutionlibrary.com/economics/economic-development/relating-intertemporal-production-with-biased-current-and-future-consumption-of-goods-1g7
... we don't know the intertemporal preferences of the incoming immigrants. They are probably keener to save because they are not sure about their future conditions, at the same time their consumption function can be determined by their level of income that could be low.
b) For these countries they might prefer to increase their current consumption because they probably see no more incentive in investing in technology. ...