Country A and Country B initially have the same real GDP per capita.Country A experiences no economic growth, while Country B grows at a sustained rate of 5 percent.In 14 years, Country A's GDP will be approximately ____ that of Country B.

Question

Quizplus · Accepted Answer

After 14 years, Country B's GDP per capita will have increased by (1.05)^14 = 2.078. This means Country B will have approximately twice the GDP per capita of Country A, as Country A's GDP per capita has not increased. Therefore, the answer is B, one-half.

Country a and Country B Initially Have the Same Real