Country a Has Been Growing at a Rate of 7

question 78

Multiple Choice

Country A has been growing at a rate of 7 percent per year,whereas country B has been growing at a rate of 2 percent per year.The Solow growth model would predict that

• A) country A is wealthier than country B.
• B) both countries are in a steady state.
• C) country B is closer to its steady state than country A.
• D) country A is closer to its steady state than country B.
• E) these two countries will never converge at the same level of wealth.