Real GDP per person is $25,000 in Aquilonia,$20,000 in Nemedia,$15,000 in Shem,and $10,000 in Zexa.Saving per person is $2000 in all three countries.Other things equal,what would we expect?
A) All four countries will grow at the same rate.
B) Aquilonia will grow the fastest.
C) Nemedia will grow the fastest.
D) Zexa will grow the fastest.

Question

Quizplus · Accepted Answer

The lower the initial level of GDP per person, the faster a country can grow due to the catch-up effect. Zexa has the lowest initial GDP per person, and therefore, we would expect it to grow the fastest.

Real GDP Per Person Is $25,000 in Aquilonia,$20,000 in Nemedia,$15,000