Neoclassical growth theory predicts that Chinaʹs economic growth rate will _______________

Question

Quizplus · Accepted Answer

Neoclassical growth theory suggests that countries with lower levels of capital and technology will grow faster than those with higher levels of capital and technology until they converge with the steady-state of the developed countries. Since China has been rapidly investing in capital and technology over the years, it is expected that its growth rate will eventually converge towards the U.S. growth rate. Therefore, the correct answer is C, that China's economic growth rate will eventually converge to the U.S. economic growth rate.

Neoclassical Growth Theory Predicts That Chinaʹs Economic Growth Rate Will