Chapter 38, Problem 5MCQ

To determine

To find:

Statement of convergence hypothesis.

Answer to Problem 5MCQ

Option B is correct.

Explanation of Solution

Convergence hypothesis emphasize that lower levels of real GDP per capita are associated with higher growth rates.

This is true for poorer countries where growth of such countries increases at an increasing rates compared to rich countries. This is because the scope of growth in poorer countries is more compared to rich countries.

Option A is incorrect.

Option C is incorrect.

Option D is incorrect.

Option E is incorrect.

Economics Concept Introduction

Economic growth is the increase in level of aggregate production of an economy which is manifested in national income. It shows the growth of production of goods and services over a year.