If real GDP in the United States is growing at an annual rate of 3.2% per capita and Bolivia's real GDP per capita is growing at a rate of 1.3%,which of the following would we expect in the long run? Assume real GDP per capita in the United States begins at a level above that of real GDP per capita in Bolivia.
A)Real GDP per capita in the United States will always be 1.9% higher than real GDP per capita in Bolivia.
B)The difference between the level of real GDP per capita in the United States and real GDP per capita in Bolivia will shrink over time.
C)The difference between the level of real GDP per capita in the United States and real GDP per capita in Bolivia will increase over time.
D)The difference between the level of real GDP per capita in the United States and real GDP per capita in Bolivia will always be $1.9 trillion.

Question

Quizplus · Accepted Answer

Since the United States' real GDP per capita is growing at a faster rate (3.2%) compared to Bolivia's (1.3%), the absolute difference in real GDP per capita between the two countries will increase over time, assuming all other factors remain constant.

If Real GDP in the United States Is Growing at an Annual