Assume a DVC has a real per capita output of $1,000 as compared to $20,000 for an IAC. If both nations realize a 2 percent growth of their real per capita outputs, after one year the absolute real per capita output gap will

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The DVC's per capita output grows by 2% of $1,000, which is $20, resulting in $1,020. The IAC's per capita output grows by 2% of $20,000, which is $400, resulting in $20,400. The new gap is $20,400 - $1,020 = $19,380, which is $380 more than the original gap of $19,000.

Assume a DVC Has a Real Per Capita Output of $1,000