If a Rich Country Grows at a Faster Rate Than

question 38

Multiple Choice

If a rich country grows at a faster rate than a poor one, then

• A)the difference in their living standards will not change over time.
• B)the gap in their standards of living will widen over time.
• C)the gap in their standards of living will close over time.
• D)Whether or not the living standards gap widens or closes over time depends on the absolute size of the relative growth rates.

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Definitions:

General Equilibrium

This is an economic concept referring to the condition where all markets in an economy are in simultaneous equilibrium, with supply meeting demand in each market.

Consumer Preference

Individual choices and priorities when selecting from a range of products or services, influenced by tastes, attitudes, and other factors.

Equilibrium Price

The price at which the quantity of a product offered is equal to the quantity of the product demanded, clearing the market.

Structural Approaches

Structural approaches refer to methods or strategies that focus on organizational design, hierarchy, and formal systems as means to achieve efficiency, coordination, and effectiveness.