If two countries start with the same real GDP/person and one country grows at 2 percent while the other grows at 4 percent ?

A. one country will always have 2 percent more real GDP/person than the other
B. the standard of living in the country growing at 4 percent will start to accelerate away from the slower growing country due to compound growth
C. the standard of living in the two countries will converge
D. Next year the country growing at 4 percent will have twice the GDP/person as the country growing at 2 percent

Correct Answer: the standard of living in the country growing at 4 percent will start to accelerate away from the slower growing country due to compound growth ✔

Last Updated: June 18, 2019