Back to Practicehard • Past Paper

Read the passage: The 'Middle Income Trap' is a situation where a country's growth plateaus after reaching middle-income levels, making it difficult to transition into a high-income economy. This is often due to a loss of competitive advantage in low-wage manufacturing. Question: Why do countries get 'trapped' in the middle-income stage?

AThey have too much money

BThey lose their competitive edge in low-wage sectors but aren't yet high-tech

CThe population stops growing

DThey stop trading with other nations