If Per Capita GDP in a Richer Country Grows at a Faster

question 53

Multiple Choice

If per capita GDP in a richer country grows at a faster annual rate than in a poorer country,

• A)the gap between their standards of living will close over time as long as the rate of population growth is higher in the poorer country.
• B)the gap between their standards of living will close over time.
• C)whether the gap in living standards widens or closes over time depends on the absolute size of the relative growth rates.
• D)the gap between their standards of living will widen over time.
• E)the difference in their living standards will not change over time.

---

Definitions:

Social Welfare Function

An economic function that ranks societal allocations of resources based on ethical principles, intending to maximize collective satisfaction or utility.

Utility Possibilities Frontier

The utility possibilities frontier is a graphical representation depicting the different distributions of utility maximization between two agents given a fixed set of resources.

Income Distribution

Income distribution refers to the way in which total income is shared among the members of a society.

Pareto Optimal

A distribution condition in which making any person's situation better is impossible without causing harm to someone else.