Which of the following statements is true?

Question

a. Countries may have a different level of income per person, but they all grow at the same rate.
b. Countries have great variance in both the level and growth rate of income per person; thus, poor countries can become relatively rich over time.
c. Countries may have a different growth rate, but they all have the same level of income per person.
d. Countries all have the same growth rate and level of output because any country can obtain the same factors of production.

Answer 1

The true statement is:

b. Countries have great variance in both the level and growth rate of income per person; thus, poor countries can become relatively rich over time.

This statement reflects the reality that countries experience diverse economic conditions, leading to different levels of income per person and varying growth rates. It is feasible for poorer countries to improve their relative economic status over time through effective policies, investment, and development strategies.