The Convergence Hypothesis of the Solow Growth Model States That

question 33

Multiple Choice

The convergence hypothesis of the Solow growth model states that all of the following will occur except that

• A) over time, gaps in per-capita income among countries will narrow.
• B) the growth rate of GDP per capita should be negatively related to the initial level of GDP per capita.
• C) steady-state growth rates of GDP per capita will be equal among countries.
• D) countries with low levels of income per capita should have higher growth rates.
• E) none of the above.

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Definitions:

Consolidated Balance Sheet

A financial statement that presents the assets, liabilities, and shareholder equity of a parent company and its subsidiaries as one entity.

Sales Revenue

The total income received from selling goods or services before any expenses are subtracted.

Other Revenues

Income from activities that are not part of a company's core business operations.

Interest Expense

The cost incurred by an entity for borrowed funds over a period of time.