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.

Question

Quizplus · Accepted Answer

Even if two countries have identical growth rates of real GDP and the same initial value of per capita real GDP, their living standards may differ because we do not know how income is distributed in the countries. Income inequality can greatly affect the standard of living of the majority population.

Suppose Two Countries Have Identical Growth Rates of Real GDP