Real GDP per person is $30,000 in Country A, $20,000 in Country B, and $11,000 in Country C. Saving per person is $1,000 in all three countries. Other things equal, we would expect that
A)all three countries will grow at the same rate.
B)Country A will grow the fastest.
C)Country B will grow the fastest.
D)Country C will grow the fastest.

Question

Quizplus · Accepted Answer

According to the catch-up effect, poorer countries (with lower GDP per person) tend to grow faster than richer ones because they can adopt existing technologies and practices from wealthier countries. Thus, Country C is expected to grow the fastest.

Real GDP Per Person Is $30,000 in Country A, $20,000