Convergence Means That

question 7

Multiple Choice

Convergence means that

• A) if poor countries grow fast, then fast growing countries are poor.
• B) all countries grow at the same rate.
• C) all countries tend towards the same per capita income.
• D) the savings rate is positively related to per capita income.

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Definitions:

Money Supply

The complete tally of money-based assets available within an economy at a certain point, counting coins, cash, and holdings in savings and current accounts.

Reserve Requirement

A rephrased definition of Required Reserves: The regulation set by central banks determining the minimum amount of deposits that banks must hold as reserves and not lend out.

Discount Rate

The interest rate charged by central banks for loans to their member banks, influencing monetary policy and economic conditions.

Open Market

An open market refers to an unrestricted market with a wide array of economic participants and transactions where goods, services, and financial assets can be traded freely.