Conditional Convergence Means That in the Long Run

question 80

Multiple Choice

Conditional convergence means that in the long run

• A)living standards converge only within groups of countries having similar characteristics.
• B)living standards converge only for countries that have the same initial capital-labour ratio.
• C)living standards around the world become the same.
• D)living standards converge even if countries have different population growth rates.

---

Definitions:

C + I

An economic term that represents the sum of consumer spending (C) and investment spending (I); key components of the Gross Domestic Product (GDP) formula.

Investment

The allocation of resources, such as capital or time, in the hope of generating future profits or benefits.

Capacity Utilization Rate

The percentage of a firm's total production capacity that is actually being used in production.

Proprietorship

A business owned and operated by a single individual, where there is no legal distinction between the owner and the business entity.