Which of the following is NOT one of the characteristics of developing countries?

1. Analyze the question You are asked to find the option that is NOT a characteristic of developing countries. Three options will be typical features, and one will be the odd one out.

2. Explain the concept Developing countries (Nigeria and many others) usually share these features:

• Low per capita income and widespread poverty
• High unemployment and underemployment
• Heavy dependence on one or a few products, such as crude oil, cocoa or groundnut (a mono-product economy)
• Low savings, because incomes are low and most of it goes on consumption
• Low investment, which leads to low capital formation
• Poor infrastructure, high population growth and a large agricultural sector

Capital formation means adding to the stock of capital goods (machines, factories, roads). It depends on savings and investment. Developing countries save little, so they cannot invest much, and capital formation stays low.

3. Step-by-step solution

• A. High unemployment: a typical feature of developing countries.
• B. Mono-product economy: a typical feature (for example, Nigeria's reliance on oil).
• C. High capital formation: not typical. Low savings and low investment lead to low capital formation, which is why these countries are called "developing."
• D. Low saving: a typical feature.

4. Answer The option that is NOT a characteristic is C. High capital formation.

5. Exam tip Remember the vicious circle of poverty: low income leads to low savings, which leads to low investment and low capital formation, which leads to low productivity and back to low income. In "NOT" questions, look for the option that describes a developed country, such as high capital formation or high per capita income.