If GDP in a Richer Country Grows at the Same

question 77

Multiple Choice

If GDP in a richer country grows at the same annual rate as in a poorer country, the

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

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Definitions:

Capital Expenditures

Capital expenditures are funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.

Additions

Refers to increases or expenses added to a specific account, often relating to assets like buildings or equipment.

Extraordinary Repairs

Infrequent expenditures that extend an asset’s life (such as a new engine in a car).

Betterments

Improvements that increase the efficiency of an asset by adding accessories or replacing parts with more effective/powerful ones.