1. According to the Penn World Tables, Real gross domestic product (GDP) per capita (2005 PPP Dollars), are given for South Korea and Mexico in the years 1975 and 2009 as below. South Korea Mexico GDP per capita in 1975 4,018.67 7,662.34 GDP per capita in 2009 25,033.62 11,628.87 a. What is the compounded average annual rate of growth for South Korea between 1975 and 2009? b. What is the compounded average annual rate of growth for Mexico between 1975 and 2009? c. Notice that in 1975 South Korea was poorer than Mexico, but by 2009 South Korea was richer than Mexico. Assuming constant growth rates over this period for both countries, as calculated in parts (a) & (b) above, in what year did South Korea overtake Mexico?
1. According to the Penn World Tables, Real gross domestic product (GDP) per capita (2005 PPP Dollars), are given for South Korea and Mexico in the years 1975 and 2009 as below. South Korea Mexico GDP per capita in 1975 4,018.67 7,662.34 GDP per capita in 2009 25,033.62 11,628.87 a. What is the compounded average annual rate of growth for South Korea between 1975 and 2009? b. What is the compounded average annual rate of growth for Mexico between 1975 and 2009? c. Notice that in 1975 South Korea was poorer than Mexico, but by 2009 South Korea was richer than Mexico. Assuming constant growth rates over this period for both countries, as calculated in parts (a) & (b) above, in what year did South Korea overtake Mexico?
Chapter20: Economic Growth In The Global Economy
Section: Chapter Questions
Problem 2P
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Transcribed Image Text:1. According to the Penn World Tables, Real gross domestic product (GDP) per capita
(2005 PPP Dollars), are given for South Korea and Mexico in the years 1975 and 2009 as
below.
South Korea
Mexico
GDP per capita in 1975
4,018.67
7,662.34
GDP per capita in 2009
25,033.62
11,628.87
a. What is the compounded average annual rate of growth for South Korea between
1975 and 2009?
b. What is the compounded average annual rate of growth for Mexico between 1975
and 2009?
c. Notice that in 1975 South Korea was poorer than Mexico, but by 2009 South
Korea was richer than Mexico. Assuming constant growth rates over this period
for both countries, as calculated in parts (a) & (b) above, in what year did South
Korea overtake Mexico?
t
50
ot
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