A planned investment spending as a percentage of global real GDP has been rising for nations with emerging economies. Global real GDP has increased every year except for a brief dip during 2009. Consequently, planned real investment has risen in all nations in most years. There has been a shift toward relatively greater increases in planned investment in emerging nations compared with developed countries.

Within any nation's economy, variations in planned real investment spending operate through the multiplier to bring about changes in equilibrium real GDP. Thus, a country that experiences a larger upward shift in its planned investment function than another nation will, if both countries' multipliers have close to the same values, observe a greater increase in its equilibrium real GDP.

This relatively larger increase in investment spending helps to explain why countries such as China, India, South Korea, and Singapore are emerging from a status of less developed toward eventual classification among developed nations. Relatively higher planned real investment expenditures in these nations are, through multiplier effects, boosting real GDP per year. Thus, flows of real GDP are expanding faster in these emerging-economy countries than in developed ones.

a. If interest rates, or opportunity costs of investment, happened to be the same in both developed countries and emerging economy nations, what could account for faster upward shifts in the latter group's planned investment functions?

b. Are stocks of productive capital currently growing at a faster pace in developed countries or in emerging-economy nations? Explain.