Macroeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (7th Edition)
7th Edition
ISBN: 9780134472669
Author: Blanchard
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 1, Problem 3QAP
a)
To determine
To Plot: Spreadsheet for next 100 years and years required for C’s level of output to be equal to the U.S.
b)
To determine
To check: Whether C’s standard of living will be the same as that of the U.S. when both countries have productivity.
c)
To determine
To suggest: Ways C adopted to increase output and whether it will be applicable to the U.S or not.
d)
To determine
To ascertain: Whether C’s model can be adopted by other countries or not.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
You are asked to perform a growth
accounting analysis for Ethiopia to inform
policy makers. Output growth in Ethiopia
was 5% per year during the period 2012-
2022. Employment growth was 3% per year
and capital was growing by 10% in the
same period. Suppose that the capital share
in income is 0.3 and that there are constant
returns to scale.
c) What was the annual growth rate of
output per worker? Of capital per worker?
d) What was the growth in total factor
productivity (technical progress)?
Qatar GDP per capita was 93,792 in 2017 and $90,070 in 1970. What was its annualized growth rate during this period? (Both figures are in 2011 international dollars.) if your answer is 1.72%, please write 1.72
Spain's current real GDP (YO) is €326 billion, and grows at a constant rate of 1.1%. Portugal's current real
GDP is smaller (€55 billion), but they are experiencing a constant 4.8% growth rate.
Part a) Calculate the real GDP for both countries 30 years, 50 years and 70 years from now. Allow the
calculator to carry decimals in your intermediate calculations, but round GDP to the nearest billion Euro.
Use these rounded values throughout the rest of the problem.
Part b) Calculate the percentage difference in real GDP between the two countries for each 20-year
interval. Report your answer in percentage form, rounded to the nearest integer.
Part c) Suppose Portugal's goal is to catch up to Spain's GDP in 25 years. What growth rate must they
sustain each year if they are to accomplish their goal? Express your answer as a percentage, rounded to
one decimal place.
Chapter 1 Solutions
Macroeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (7th Edition)
Knowledge Booster
Similar questions
- Suppose a country has a real GDP per capita of $69,000 and grows at a constant rate for the next 49 years. How much larger (in percentage terms) is this country if its growth rate is 4.13% instead of 3.05% after 49 years of growth? Answer this as a percentage and round your answer to two digits after the decimal without the percentage sign. ex. If you found the rate to be 5.125%, answer 5.13.arrow_forwardIn 2017, the population in the US was estimated at 325.1 million. The population in 2018 was estimated to be 326.8 million. Assuming that the population growth is compounding annually at a constant growth rate, calculate the growth rate from year 1 to year 2. Source: United States Census Bureau 0.45 % 5.2 % 4.5 % 0.52%arrow_forwardReal GDP per capita in the country of Arcadia grew from about $4,666 in 1900 to about $42,069 in 2008, which represents an annual growth rate of 2.06 percent. If Arcadia continues to grow at this rate, calculate the number of years when its real GDP per capita will double. years. (Enter your response as an integer.)arrow_forward
- The CDB said that its projection of growth comes after an extremely difficult year in which the economies of its 19 borrowing member countries (BMCs) contracted by 12.8 percent on average due to the onset of novel coronavirus. “In 2020, the majority of BMCs registered double-digit declines in GDP. Countries with significant tourism industries, such as The Bahamas, Barbados, Belize, Cayman Islands, Dominica, and Grenada, were hard-hit by a more than 70 percent drop in overnight visitors in 2020, which spilled over to affect other economic sectors. An increase in agricultural production in Jamaica could not prevent the economy from shrinking by 10.4 percent. Agriculture in Belize was affected by a severe drought from the previous year and then a reduction in tourism-related demand. The economy contracted by 13.3 percent. Guyana was the only economy to record economic growth (26 percent), solely due to the start-up of its first oil production. However, growth was lower than expected due…arrow_forwardSay that the average worker in Canada has a productivity level of $30 per hour while the average worker in the United Kingdom has a productivity level 34. of $25 per hour (both measured in U.S. dollars). Over the next five years, say that worker productivity in Canada grows at 1% per year while worker productivity in the UK grows 3% per year. After five years, who will have the higher productivity level, and by how much?arrow_forwardCountry A and Country B both have the production function Y = F(K,L) = K¹/32/3 Assume that neither country experiences population growth or technological progress and that 20 percent of capital depreciates each year. Assume further that country A saves 10 percent of output each year and country B saves 30 percent of output each year. Now suppose that both countries start in year 1 with a capital stock per worker of 1. In what year will consumption in country B be higher than consumption in Country A? An excel spreadsheet may help simplify your calculation. You will need to round your calculations to 3 decimal places. O 5 6 t 7arrow_forward
- GDP per capita in the United States was approximately $63,000 in 2020. Use the growth formula (see below) to answer the following questions: Growth formula: (future value) = (present value) × (1 + r)t present value = this year's GDP per capita future value = GDP per capita in the future r = rate of growth (in decimal form) per year What will GDP per capita be in the year 2025 if it grows each year by 2.5 percent?arrow_forwardA2-4 Suppose that there are two countries, X and Y, which differ in both their rates of investment and their population growth rates. In Country X, investment is 25% of GDP and the population grows at 0% per year. In Country Y, investment is 5% of GDP, and the population grows at 5% per year. The two countries have the same levels of productivity, A. In both countries, the rate of depreciation, 8, is 10%. Use the Solow model to calculate the ratio of their steady state levels of income per capita, assuming that production function follows a constant return to scale Cobb-Douglas function with a = 1/3?arrow_forwardIf the GDP (t) of Japan is $997.50B today and this country is expecting its GDP (t+1) to be $1,076.9 next year, what is the expected growth rate?arrow_forward
- In 2019 a country has 7.48% growth in real gdp, and uses two factors of production: capital (K) and labor (L). In the table below you see the growth rates of the factors of production. Assume that the share of capital in the production is 40% and the share of labor in production is 60%. Capital (K) Labor (L) A country 4.67% 1.89% How much does growth in capital contribute to GDP growth? Write your answer as a percentage, round at two (2) decimals and do not write the percentage sign.arrow_forwardSuppose you are a highly regarded international economic advisor. You have been asked to assess the possibilities of growth in an African country. It is a country abundant in labour and some natural resources. The capital to labour ratio is low. It has a free market economy. You have found that this country does not have a very strong and healthy banking system; however, the political system is stable and the government does a good job protecting property rights. Assess this country’s prospects for growth. Recommend two things that would enhance the country’s growth Consider a simple economy that produces only three products: hot dogs, torches and golf balls. Use the information in the following table to calculate the inflation rate for 2018, as measured by the consumer price index. Product Quantity Base Year Price (2009) Price (2017) Price (2018) Hot dogs 10 $1.00 $1.50 $1.75 Torches 15 $5.00 $7.00 $6.75 Golf balls 8 $2.00 $3.00…arrow_forwardSuppose the two nations start out in 2016 with identical levels of output per worker hour say, $100 per hour. In the first nation, labor productivity growth by 1% per year. In the second girls by 2% per year. Use a calculator or a spreadsheet to determine how much output per hour each nation will be producing 20 years later, assuming the labor productivity growth rates do not change. Then, determine how much each will be producing per hour 100 years later. What do your results tell you about the effects of small differences in productivity growth rates?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education