CFA Practice Question

There are 253 practice questions for this study session.

CFA Practice Question

If they have the same saving rate, population growth rate and production function, developing countries will eventually catch up with the developed countries. This is referred to as:
A. absolute convergence.
B. relative convergence.
C. conditional convergence.
Explanation: When this happens, the neoclassical theory predicts both output level per capita and growth rates per capita will be the same between developing and developed countries.

User Contributed Comments 1

User Comment
SMcalister Absolute convergence states it'll happen regardless overtime.

Conditional convergence puts out a few rules. Savings rates, population growth and production functions need to be the same.
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