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The Rate of Economic Growth Per Capita in Mamoogia from 1996

Question 29

Multiple Choice

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 Mamoogia and $12,700 in Kennan.Assume the growth rate for each country remains the same.Calculate the percentage difference in their levels of potential output in 2040.


A) Kennan's potential output will be about 32% lower than Mamoogia's potential output.
B) Kennan's potential output will be about 24% lower than Mamoogia's potential output.
C) Kennan's potential output will be about 32% higher than Mamoogia's potential output.
D) Kennan's potential output will be about 24% higher than Mamoogia's potential output.

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