The Convergence Hypothesis Says That

question 61

Multiple Choice

The convergence hypothesis says that:

• A) differences in real GDP per capita among countries tend to narrow over time.
• B) differences in real GDP per capita among countries tend to increase over time.
• C) differences in real GDP per capita do not have much effect on living standards in the long run.
• D) aggregate production functions in different countries will all be the same in the long run.

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Definitions:

Financing Activities

Activities relating to raising money from investors and creditors such as the issuance of stocks and bonds and long-term notes; also, repurchase of outstanding stock and retiring bonds and notes as well as paying dividends.

Retained Earnings Activities

The portion of net income left over for the business after it has paid out dividends to its shareholders, often reinvested into the business or kept as a reserve.

Operating Revenue

Income earned from a company's core business operations, excluding revenue from non-operating sources like investments.

Operating Activities

Involves the primary revenue-generating activities of an organization, such as sales and services, as reflected in its cash flow.