Real GDP per person is $25 000 in Aquilonia, $10 000 in Nemedia, $15 000 in Shem, and $20 000 in Zexa. Saving per person is $2000 in all three countries. Other things equal, what would we expect?

Question

Quizplus · Accepted Answer

Countries with lower real GDP per person tend to grow faster due to the catch-up effect, assuming similar savings rates. Nemedia, having the lowest GDP per person, is expected to grow the fastest.

Real GDP Per Person Is $25 000 in Aquilonia, $10