Suppose Two Countries Have Identical Growth Rates of Real GDP

question 173

Multiple Choice

Suppose two countries have identical growth rates of real GDP and the same initial value of per capita real GDP. We know, then, that

• A) life expectancies are the same in both countries.
• B) economic well being is the same in both countries.
• C) living standards may differ in the two countries because we don't know how income is distributed in the countries.
• D) living standards in the two countries are probably identical, or very close to each other.

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Definitions:

Industrial Economy

An economy characterized by significant industrial activity, often involving manufacturing and the production of goods.

Fine-Tuning

The process of making minor adjustments to monetary and fiscal policy to stabilize the economy, aiming to maintain steady growth and low inflation.

Economic Stability

Economic stability refers to a condition where an economy experiences steady growth, low inflation, and minimal unemployment, thereby reducing uncertainty in economic planning.

Government Policies

A course or principle of action adopted or proposed by a government, political party, or ruling authority.