Macroeconomics
21st Edition
ISBN: 9781259915673
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 8, Problem 4P
To determine
Annual rate of economic growth .
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Students have asked these similar questions
Last year real GDP in the imaginary nation of Olympus was 445.0 billion and the population was 2.2 million.
The year before, real GDP was 390.0 billion and the population was 2.1 million. What was the growth rate
of real GDP per person during the year?
14.1 percent
O 0.09 percent
O 1.09 percent
8.9 percent
5)
Suppose that an economy starts off with a per capita real GDP of $5,000.
How large will the per capita GDP of this country be if it grows at an annual rate of 6% for 40 years?
Use compound growth rate formula. Show your calculations and the unit of account of your answer.
Answer:
6)
The graph below represents per-worker production functions for the same country. Answer the
following questions using this graph.
Real GDP
per hour
worked, Y/L
$17,000
16,400
16,000
15,000
Production
function3
B
Production
function2
E
Production
function1
a)
Answer:
$50,000
60,000
70,000
Capital per hour
worked, K/L
Which concept is illustrated by the movement from point A to B or from point B to C?
What has been the average annual growth rate of U.S. real GDP per person over the 120 years from 1900 to 2020?
In which decade, beginning with the 1960s, was the growth of potential GDP per person greatest and slowest?
Over the 120 years from 1900 to 2020, the average annual growth rate of U.S. real GDP per person is ____ percent
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- Suppose China’s GDP is growing by 7% a year and its population grows by 1% a year. Also suppose that US GDP grows by 3% a year and its population grows by 1% a year, and that in 2019 US GDP is 1.5 times China’s while US population is one quarter of China’s. If these growth rates continue By what year will China’s GDP double? Its population? Its per capita GDP?In what year will China’s GDP equal US GDP?In what year will China’s GDP per capita equal US GDP per capita?arrow_forwardAssume real per capita GDP in West Swimsuit is $8,000 while in South Darlinia it is $2,000. The annual growth rate in West Swimsuit is 2.33%, while in South Darlinia it is 7%. How many years will it take for South Darlinia to catch up to the real per capita GDP of West Swimsuit? What will the income of the two countries be when it is equal? type answer only. Do it correctly. Multiple votes will given accordingly.arrow_forwardSuppose that two nations start out in 2007 with identical levels of output per work hour-say, $100 per hour. In the first nation, labor productivity grows by 1 percent per year. In the second, it grows by 2 percent per year. Use a calculator or a spreadsheet to determine how much output per hour each nation will be producing 20 years later, assuming that 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
- What has been the average annual growth rate of U.S. real GDP per person over the 120 years from 1900 to 2020? In which decade, beginning with the 1960s, was the growth of potential GDP per person greatest and slowest? Over the 120 years from 1900 to 2020, the average annual growth rate of U.S. real GDP per person is _____ %arrow_forwardSuppose, a country X has a GDP level of 4, 50,000 and a growth rate of 10% in 2007(calculated at the end of the fiscal year 2007). The experts predict that the growth ofthe economy of Country X will gradually slowdown in the coming years. Moreprecisely, they foresee the following growth rates for the future:2007 – 2010 = 10%2010 – 2013 = 9%2013 – 2016 = 7.5%2016 – 2019 = 5%2019 – on = 1% Hint: The list above should be read as saying that, for instance, the growth rate fromthe end of the fiscal year 2007 until the end of 2010 will be 10 %, then from the end of2010 until the end of 2013 it will be 9% and so on. Assuming that the predictions of the experts listed above are accurate, when in thefuture will Country X’s GDP double compared to the GDP level of 2007? Consider now the more optimistic scenario in which the economy does not slow downand the current growth rate of 10% remains constant in the coming years. How longwill it take for the GDP level to double in this scenario? Express…arrow_forwardSuppose that work hours in New Zombie are 200 in year 1 and productivity is $8 per hour worked. What is New Zombie’s real GDP? If work hours increase to 210 in year 2 and productivity rises to $10 per hour, what is New Zombie’s rate of economic growth? Explain why sustained long-term economic growth comes from increases in labor productivity. Why do you think the trend rate of U.S. productivity growth has increased since the earlier 1973–1995 period?arrow_forward
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