Passage The process by which countries close their labour-productivity gap with the technology leader is based on convergence the…

Question

Passage:

The process by which countries close their labour-productivity gap with the technology leader is based on convergence theory. The convergence model divides economic eras into three phases: the breakaway, the catch-up, and the fine-tuning phase. It also divides economic entities into two categories: the technology leaders and the technology followers. The process begins with the development of a new technology, such as scavenging three million years ago (MYA), hunting—one MYA, farming—12 thousand years ago, and industrial technology—a little more than 200 years ago. During the breakaway phase, the per capita income of the technology leaders (e.g., Western Europe and North America in the industrial era) rises, but is unchanged for the technology followers. In the catch-up phase, the followers adopt the new technology and close their per capita income gap with the technology leaders. In the fine-tuning phase, where participants try to extract the remaining benefits from an increasingly exhausted technology, leaders and followers have similar per capita incomes.

Which of the following statements is/are correct?

1. The convergence model divides nations into three phases of economic progress.

2. At the heart of the convergence theory is the closing of the gap between labour and productivity.

3. Technology leaders typically have arrived earlier at different economic eras.

4. The time period covered by the convergence theory presented herein encompasses, as mentioned, 4012200 years.

Select the answer using the code given below.

1. A. 2 and 4
2. B. 2 and 3 (Correct answer)
3. C. 3 only
4. D. 1, 3 and 4

Correct Answer

Option B — 2 and 3

Detailed Solution & Explanation

The correct answer is Option B.

Key Points

• Correct statements are 2 and 3.
• 2 — convergence theory is fundamentally about closing the labour-productivity gap with the technology leader.
• 3 — technology leaders arrive earlier at each new economic era, with followers catching up later.

Additional Information

• 1 is wrong — the model divides economic eras (not nations) into three phases.
• 4 is wrong — the time span runs from scavenging ~3 million years ago to industrial technology ~200 years ago, not a figure like "4012200 years". Hence 2 and 3 → Option B.