Nations with Low Levels of GDP Per Capita May Converge

question 93

Multiple Choice

Nations with low levels of GDP per capita may converge to richer nations if

• A) nations with high levels of income experience a continuously increasing growth rate.
• B) nations with lower levels of income grow more quickly than those with higher levels of income.
• C) nations with lower levels of income spend less on investment.
• D) nations with lower levels of income grow more slowly than those with higher levels of income.

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Definitions:

Profitability

The ability of a firm to earn income.

Cash Inflows

Money or other assets that come into a company or economy, often from sales, investments, financing, and other sources.

Cash Payback Period

The duration required for an investment to generate cash flows sufficient to recover the initial outlay or cost.

Net Income

A company's earnings that remain after subtracting all expenses and taxes from total revenue.