Suppose that one country has a GDP that is ten percent of its richer neighbor, but the poorer country is growing at a rate of eight percent per year while the richer country is growing at a rate of two percent per year
Which country will be richer in 60 years?
Using the rule of 70, it can be shown that the poor country will be richer in 60 years. The poor country's GDP will have doubled more than six times over this period, while the rich country's GDP will not have even doubled twice. So while the poor country might have started slowly, it is much richer than the rich country by 60 years later!
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The supply curve for high-skilled labor lies to the
A) right of the supply curve for low-skilled labor because more people want a high-skilled job. B) left of the supply curve for low-skilled labor because more people want a high-skilled job. C) left of the supply curve for low-skilled labor because it is costly to acquire skills. D) right of the supply curve for low-skilled labor because fewer high-skilled people are willing to work for a low wage.
The characteristic of limited liability enables corporations to
A) avoid taxes on some of their profits. B) exist even when owners die. C) raise large amounts of financial capital. D) start up and dissolve easily.