According to the Convergence Hypothesis, Differences in Real GDP Per

question 235

Multiple Choice

According to the convergence hypothesis, differences in real GDP per capita among countries tends to narrow over time because countries that start with a _____ real GDP per capita tend to have _____ growth rates.

• A) lower; higher
• B) lower; lower
• C) higher; higher
• D) higher; negative

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Definitions:

Market Efficiency

A concept that describes the degree to which stock prices and other securities prices reflect all available, relevant information.

Market Value

The ongoing cost in the market for an asset or service to be sold or bought.

Investment Cost

The total expenses incurred in purchasing an asset, including the price of the asset plus any additional fees or charges.

Return on Investment

A measure of the profitability of an investment, calculated as the net profit from the investment divided by the initial cost of the investment.