Question

A country with a very low per capita GDP can have a very high growth rate because mathematically, when the________ is________, even a small difference in the________will result in a large growth rate.

Answer 1

Answer:

A country with a very low per capita GDP can have a very high growth rate because mathematically, when the DENOMINATOR is VERY LOW, even a small difference in the NUMERATOR will result in a large growth rate.

Explanation:

The reason why poor countries tend to grow at much higher rate than rich countries is fairly simple to explain, a small increase in absolute revenue will result in a large percent increase. On the other hand, rich countries need really large increases in revenue in order to get a small percent increase.

For example, in 2018 the GDP per capita in the US is $62,641, a $1,000 increase would result in only a 1.6% increase.

On the other hand, in 2018 the GDP per capita in China is $10,200, a $1,000 increase would result in a 9.8% increase.

in 2018 the GDP per capita in Africa (the whole continent) is $4,097.85, a $1,000 increase would result in a 24.4% increase.

In order to get a 24.4% increase in the American GDP per capita, an increase of $19,781.37 would be needed. China's economic indicators are showing this, before t grew by more than 10% per year, now it is growing below 7%, and soon it will be growing at around 5%. It is not possible to keep growing at extremely high rates forever.

Answer 2

Answer:

Denominator

Lower

Numerator

Explanation:

The reason is that the statement is talking about the low per capita GDP which we can see in the picture attached with this answer.

We can see that if the denominator is lower which means that either population decreases or remains constant when the GDP has increased then the the growth in the per capita GDP will be higher because minute increases in the GDP will increase the answer with significant percentages.