Suppose GDP in a Richer Country Is Growing at the Same

question 59

Multiple Choice

Suppose GDP in a richer country is growing at the same annual rate as in a poorer country.An implication of these growth rates is that the

• A)gap between their standards of living will widen over time.
• B)gap between their standards of living will close over time.
• C)gap between their standards of living will close over time as long as the rate of population growth is lower in the poorer country.
• D)gap between their standards of living will close over time as long as the rate of population growth is lower in the richer country.
• E)difference in their living standards will not change over time.

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Definitions:

Perfect Competition

Perfect Competition is a market structure characterized by a large number of small firms, identical products sold by all firms, no barriers to enter or exit the market, and perfect knowledge of prices and technology.

Perfect Competitor

Describes a market scenario where numerous small firms compete against each other, and no single firm can influence the market price of goods and services.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded.

Product Differentiation

The process by which companies distinguish their products or services from others in the market to attract a specific target audience.