Which statement best describes the relationship between the initial wealth and the growth rate of a country?
A) Countries with the highest growth rates over the past 140 years are the ones that had the highest level of real GDP 140 years ago.
B) Countries that were rich 140 years ago had little fluctuation around their average growth rates during the past 100 years.
C) Though the catch-up effect may suggest otherwise, the data show no strong relationship between initial conditions and growth rates.
D) Over the past 140 years, the United States had the highest real GDP growth rate, and now it has the highest real GDP per person.

Question

Quizplus · Accepted Answer

The statement suggests that there is no strong relationship between initial wealth and growth rate. The catch-up effect refers to the idea that poorer countries can catch up to richer countries in terms of economic growth by adopting new technologies and methods of production. However, this statement suggests that this effect is not strongly supported by the data over the past 140 years.

Which Statement Best Describes the Relationship Between the Initial Wealth