Which of the Following Is Consistent with the Catch-Up Effect

question 25

Multiple Choice

Which of the following is consistent with the catch-up effect?

• A)The United States had a lower growth rate before 1900 than after.
• B)Japan has a higher growth rate than Germany.
• C)Although Canada has a relatively high level of output per person, its growth rate is still high compared to some poorer countries, such as Pakistan.
• D)After World War II, Canada had lower growth rates than war-ravaged European countries.

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Definitions:

Funds

Financial resources set aside for a specific purpose or investment vehicle pooling investors’ capital for the purpose of investing in securities and other assets.

Abnormal Return

Returns on a security that differ from the expected rate of return, often adjusted for risk.

Bogey Portfolio

A reference portfolio used to gauge the performance of an investment portfolio.

Asset Classes

Categories of assets, such as stocks, bonds, real estate, and cash, that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same laws and regulations.