The following table reports real income per person for several different economies in the years 1960 and 2010. It also gives each economy's average annual growth rate during this period. For example, real income per person in Madagascar was $1,223 in 1960, and it actually declined to $789 by 2010. Madagascar's average annual growth rate during this period was -0.87%, and it was the poorest economy in the table in the year 2010.

The real income-per-person figures are denominated in U.S. dollars with a base year of 2005. The following exercises will help you to understand the different growth experiences of these economies.

Indicate which economy satisfies each of the following statements.

Consider the following list of four countries. Which economy began with a level of real income per person in 1960 that was well below that of New Zealand and grew fast enough to catch up with and surpass New Zealand's real income per person by 2010?

1. Indonesia
2. Sri Lanka
3. Taiwan
4. United States

Economy United States New Zealand Indonesia Taiwan Sri Lanka Madagascar Real Income per Person in 1960 Real Income per Person in 2010 (Dollars) 15,136 (Dollars) 41,858 12,868 24,397 744 3,993 2,061 32,865 790 4,047 1,223 789 Annual Growth Rate (Percent) 2.06 1.29 3.42 5.69 3.32 -0.87 Statement This economy experienced the fastest rate of growth in real income per person from 1960 to 2010. This economy had the highest level of real income per person in the year 2010. Indonesia Madagascar New Zealand Sri Lanka Taiwan United States