At the Beginning of the Year, One Developing Country (DVC)has

question 117

Multiple Choice

At the beginning of the year, one developing country (DVC) has a real income per capita of $800. In a developed country (IAC) , the real income per capita is $30,000. Both countries experience a 4 percent growth rate for the year. At the end of the year, the absolute income gap between these two countries will have increased from $29,200 to

• A)$30,368.
• B)$31,200.
• C)$30,120.
• D)$32,032.

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Definitions:

International Trade

The exchange of goods and services across national borders, driven by the principle of comparative advantage.

Economic

Pertaining to the production, distribution, and use of income, wealth, and commodities.

Domestically

Pertaining to activities or production within a country's own borders, as opposed to internationally.

Trade Barriers

Measures imposed by governments to regulate or limit international trade, including tariffs, quotas, and import bans.