The idea of convergence of GDP in Europe suggests that ?
Correct answer: D. Poorer less developed countries will catch up with richer ones.
- A. All countries will eventually join the EEC
- B. Poorer countries have higher capital/labour ratios than richer countries.
- C. The gap between countries GDP per head will widen
- D. Poorer less developed countries will catch up with richer ones.
Explanation
GDP convergence means poorer economies grow faster and gradually catch up with richer economies in GDP per person. This is associated with diminishing returns to capital and opportunities to adopt existing technology.
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