(Table 4: Econia and Macroland Growth, 2008 to 2018) Table

question 28

Multiple Choice

(Table 4: Econia and Macroland Growth, 2008 to 2018) Table 4 provides data on GDP growth for Econia and Macroland. Which statement correctly identifies the country that was experiencing catch-up growth during the decade 2008 to 2018 and why?
$\begin{array}{l}\text { Table 4. Econia and Macroland Growth, } 2008 \text { to } 2018\\\begin{array}{|l|l|l|}\hline & \text { Econia } & \text { Macroland } \\\hline 2008 \text { real GDP } & \$ 0.40 \text { trillion } & \$ 2 \text { trillion } \\\hline 2018 \text { real GDP per capita } & \$ 1,000 & \$ 20,000 \\\hline 2018 \text { real GDP } & \$ 1.04 \text { trillion } & \$ 2.96 \text { trillion } \\\hline 2018 \text { real GDP per capita } & \$ 2,367 & \$ 22,090 \\\hline \begin{array}{l}\text { Annual growth rate real GDP, } \\2008 \text { to } 2018\end{array} & 10 \% & 4 \% \\\hline \begin{array}{l}\text { Annual growth rate real GDP } \\\text { per capita, } 2008 \text { to } 2018\end{array} & 9 \% & 1 \% \\\hline\end{array}\end{array}$

• A) Econia was experiencing catch-up growth because its annual growth rate of real GDP per capita is catching up with its annual growth rate of real GDP, whereas the gap is wider in Macroland.
• B) Econia was experiencing catch-up growth because its average resident has a lower standard of living than people in Macroland, but Econia's annual growth rate of real GDP per capita is much higher, so eventually it will catch up with Macroland's standard of living.
• C) Macroland was experiencing catch-up growth because its real GDP per capita increased by a larger dollar amount than Econia's, and so Econia is not catching up with it.
• D) Macroland was experiencing catch-up growth because the wide gap between the annual growth rates of real GDP and real GDP per capita indicates that the economy is almost caught up and ready to stabilize.

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