Convergence Theory posits that when a country converges with wealthy economies, its growth rate tends to do what?

• A. Accelerate
• B. Slow down
• C. Become volatile
• D. Fluctuate randomly

Answer: (B)

Convergence means poorer economies catch up to richer ones, and as they close the gap, their growth rate tends to slow down. Initially, a country far behind can grow quickly by adopting existing technologies and increasing capital, but as it approaches the level of wealthier peers, the additional gains from capital accumulation diminish, so growth tapers off toward a steady pace. This is why the expected pattern is a slowing growth rate during convergence.

Accelerating growth would require ongoing, sustained pushes beyond catch-up (like rapid technology adoption or reforms) and isn’t the typical trajectory of convergence. Becoming volatile or fluctuating randomly aren’t inherent features of converging growth; while shocks can cause short-term swings, the standard idea is a gradual slowdown as the gap narrows.