Which of the following statements 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 100 years are the ones that had the highest level of real GDP 100 years ago.
B)Countries that were rich a century 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 100 years, Japan had the highest real GDP growth rate, and now it has the highest real GDP per person.

Question

Quizplus · Accepted Answer

The catch-up effect theory suggests that countries with low initial levels of real GDP have higher growth rates than those with high initial levels. However, the data shows no strong relationship between initial conditions and growth rates. Therefore, option C is the correct answer. Option A and D make incorrect claims by choosing specific countries, and option B is too narrow in its scope.

Which of the Following Statements Best Describes the Relationship Between