Suppose That Real GDP Per Capita of a Rich Country

question 99

Multiple Choice

Suppose that real GDP per capita of a rich country is $40,000. Real GDP per capita in a poor country is $10,000. Suppose that rate of growth of GDP per capita in the rich country is 3.6% per year and in the poor country is 7.2% per year. Using the rule of 72, calculate how many years it will take for real GDP per capita in the poor country to catch up with GDP per capita in the rich country?

• A) 10 years
• B) 20 years
• C) 30 years
• D) 40 years

Grasp the effects of changes in the price level on aggregate demand, aggregate supply, and aggregate expenditure.

Comprehend the relationship between consumption, saving, and income.

Identify the determinants of investment and the concept of the investment demand curve.

Recognize how shifts in the aggregate demand and aggregate expenditure curves affect the economy.

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Definitions:

Two-Factor Theory

A theory in psychology that posits emotions are based on physiological arousal and cognitive labels.

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