Which statement 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 century,the United States had the highest real GDP growth rate,and now it has the highest real GDP per person.

Question

Quizplus · Accepted Answer

The statement suggests that there is no strong relationship between initial wealth and growth rate. The catch-up effect, which suggests that poorer countries will grow faster than richer countries, may not hold true in all cases. Therefore, Option C is the best choice. Option A and D are incorrect because they make specific claims about certain countries, while the question asks for a general statement. Option B is also incorrect because it assumes that rich countries have consistent growth rates despite changes in economic conditions.

Which Statement Best Describes the Relationship Between the Initial Wealth