Sweden has real gdp per capita of $50,000, while chile has real gdp per capita of $25,000. if real gdp per capita in sweden grows at 2% and chile's real gdp per capita grows at 4%, how long will it take for real gdp per capita in the two nations to converge?
a) 20 years
b) 35 years
c) 25 years
d) 15 years

option (B) 35 years

Explanation:

Given:

Real per capita GDP of Sweden = $50,000

Real per capita GDP of Chile = $25,000

Growth rate of Sweden = 2%

Growth rate of Chile = 4%

As per the Rule of 70, the economy's GDP doubles in

Therefore,

The GDP of Sweden will double in = = 35 years

and,

Chile will double in = 17.5 years

Therefore,

in 35 years the GDP of Sweden will be $100,000

and,

In 35 years the GDP of Chile will also be ($50,000 in 17.5 years and $100,000 in next 17.5 years) = $100,000

Therefore,

The real GDP per capita in the two nations to converge in 35 years

Hence,

The correct answer is option (B) 35 years

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turnover

the amount of money taken by a business in a particular period.