6. Convergence theory

The following table shows real GDP per capita for the United States, Taiwan, and Uganda between 1970 and 2000. All figures are in 1998 U.S. dollars.

	United States	Taiwan	Uganda
Year	Real GDP per Capita	Growth Rate	Real GDP per Capita	Growth Rate	Real GDP per Capita	Growth Rate
1970	$18,395		$2,319		$190
1980	$22,666	23%	$4,483		$182
1990	$28,435	25%	$8,431		$176
2000	$34,770	22%	$14,504		$247

Source: Organisation for Economic Cooperation and Development (OECD)

The (decade-long) economic growth rate for the United States is shown in the second column. For example, from 1970 to 1980, the United States GDP grew from $18,395 to $22,666, an increase of $22,666?$18,395$18,395=23%$22,666?$18,395$18,395=23%.

Use this method to fill in the growth rates for Taiwan and Uganda.

Compare the data for the United States and Taiwan between 1970 and 1980. During this period, ____ had a higher level of real GDP per capita, while _____experienced a higher growth rate in real GDP per capita.

Answers for two blank spaces either "United States" or "Taiwan"

Convergence theory predicts that poor countries will grow more quickly than rich countries. Which one of the following is a reason for this?

1. Rich countries devote a large fraction of their GDP to helping poor countries.

2. Copying existing technologies is less expensive than developing them independently.

3. Poor countries tend to have higher birth rates than rich countries.

Those who don't believe in the theory of convergence point to countries such as ________ (Answer block, "United States, Uganda, or Taiwan . Which of the following statements can explain why the theory of convergence may not always hold? Check all that apply.

1. Many poor countries have much higher birth rates than rich countries.

2. Rich countries actively try to keep poor countries poor through economic and military policies.

3. Convergence theory applies only to small countries.

The growth experience of Taiwan illustrates that relatively poor countries can ________ (Answer block, "always be much poorer than" "grow more quickly than" "grow more slowly than" "be invaded by" rich countries. What is the primary reason for this?

1. Rich countries devote a large fraction of their GDP to helping poor countries.

2. Copying existing technologies is less expensive than developing them independently.

3. Poor countries tend to have higher birth rates than rich countries.

5. Convergence theory The following table shows real GDP per capita for the United States, Taiwan, and Uganda between 1970 and 2000. All figures are in 1998 United States Taiwan Uganda Year Real GDP per Capita Growth Rate Real GDP per Capita Growth Rate Real GDP per Capita Growth Rate 1970 $18,395 $2,319 $190 1980 $22,666 23% $4,483 93% $182 -4.21% 1990 $28,435 25% $8,431 88% $176 -3.3% 2000 $34,770 22% $ 14,504 72% $247 40.34% Source: Organisation for Economic Cooperation and Development (OECD) The (decade-long) economic growth rate for the United States is shown in the second column. For example, from 1970 to 1980, the United $22.666-$18 395 grew from $18,395 to $22,666, an increase of 23%