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To say that the Chinese growth numbers have been strong in recent years is an understatement. The figure below shows annualized, real quarterly GDP growth

To say that the Chinese growth numbers have been strong in recent years is an understatement. The figure below shows annualized, real quarterly GDP growth rates from 2007 to 2011, in which the per capita GDP growth rates track the GDP growth rates closely.

In the context of the Solow model, which of the following statements BEST EXPLAINS China's fast growth during that period?

A. Significant capital accumulation already occurred before 2007, which helped China reach a high level of capital per worker.

B. High consumption rates in China boosted the aggregate demand, which raised the GDP growth.

C. Persistent high savings rate, along with technological advances, contributed to China's continued high growth rate.

image text in transcribed
CHINA GDP GROWTH RATE Annual GOP Growth Adjusted by Inflation 14 14 13 12.6 11.9 12 - -11.5 -12 112 10.6 10.7 10.1 10.3 10 - 9.6 9.8 -10 9 9.1 7.9 6.8 6.2 6 2007 2008 2009 2010 2011 source: Trading Economics.com; National Bureau of Statistics

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