The rate of economic growth per capita in Mamoogia from 1996 to 2000 was 1.8% per year, while in Kennan, over the same period it was 4.5%.In 2000, per capita real GDP was $28,900 in France and $12,700 in Kennan.Assume the growth rates for each country remain the same.Which country will have a higher level of potential output in 2040?

Question

Quizplus · Accepted Answer

Kennan's higher growth rate of 4.5% compared to Mamoogia's 1.8% will result in a higher potential output by 2040, despite starting with a lower GDP per capita.

The Rate of Economic Growth Per Capita in Mamoogia from 1996