Which of the following statements is true?
A) Countries all have the same growth rate and level of output because any country can obtain the same factors of production.
B) Countries have great variance in both the level and growth rate of GDP/person; thus, poor countries can become relatively rich over time.
C) Countries may have a different level of GDP/person but they all grow at the same rate.
D) Countries may have a different growth rate but they all have the same level of GDP/person.

Question

Quizplus · Accepted Answer

This statement is true because countries have different levels of natural resources, human capital, and technology, which affect their ability to produce goods and services. As a result, there is great variance in both the level and growth rate of GDP/person, and poor countries can become relatively rich over time through investment in these factors. A, C, and D are all false statements.

Which of the Following Statements Is True