The following information refers to Questions 1 through 6.
Questions
1. Based on Exhibit A, the factor that would most likely have the greatest positive impact on
the per capita GDP growth of Country A is:
A. free trade.
B. technology.
C. saving and investment.
2. Based on Observation 1, in the long run the ratio of profits to GDP in Country A is most likely to:
A. remain near its current level.
B. increase from its current level.
C. decrease from its current level.
3. Based on Observation 2, Country C is most likely to have:
A. relatively low real asset returns.
B. a relatively low real interest rate.
C. a relatively high real interest rate.
4. Based on Exhibit B, the least likely reason for the current pace of GDP growth in Country D is:
A. a persistently strong currency.
B. strong manufacturing exports.
C. strong natural resource exports.
5. The type of convergence described by O’Leary in Statement 1 is best described as:
A. club convergence.
B. absolute convergence.
C. conditional convergence.
6. Which of the following growth models is most consistent with O’Leary’s Statement 2?
A. Classical
B. Endogenous
C. Neoclassical