GRAPH SETTINGS Reset Country-X Initial Value ($50 – $10,000) 1,000.00 Value (thousands of dollars) [Country-X = Country-Y] Growth Rate: 3% 10 9 0.1% 10.0% 8 Country-Y 7 Initial Value 2,000.00 ($50 – $10,000) 4 Growth Rate: 1% 0.1% 10.0% 1 35.4 yrs. E CALCULATIONS 10 15 20 25 30 35 40 Years Value in Country-X Country-Y 10 years $1,343.92 $2,209.24 20 years $1,806.11 $2,440.38 Country-X Country-Y 30 years $2,427.26 $2,695.70 Instructions: Modify the settings in the interactive tool as needed to answer the questions below. Suppose country X currently produces $1800 of goods and services per year with a constant growth rate of 4.8% per year. Country Y's production is currently $4500 with growth of 3.0% per year. a) Using the rule of 72, how long does it take for country X's production to double? years b) Using the rule of 72, how long does it take for country Y's production to double? years c) Even if an intersection point does not appear on the graph, will the production level of the two countries ever equal? OYes, smaller countries always catch up to larger countries, regardless of growth rates. ONo, since they don't intersect on the graph we can't know what happens in future years. ONo, the initial value is too large, the country with lower production cannot grow fast enough. OYes, the smaller production country's larger growth rate allows the country to catch up. d) After 60 years, how many times will country X's production have doubled? (Round down to a whole number) e) After 60 years, how many times will country Y's production have doubled? (Round down to a whole number) f) Given your answers to the previous two questions, will the two countries' productions have crossed within 60 years? Oyes Ono rev: 07 05 2021 Q C CS-268219
GRAPH SETTINGS Reset Country-X Initial Value ($50 – $10,000) 1,000.00 Value (thousands of dollars) [Country-X = Country-Y] Growth Rate: 3% 10 9 0.1% 10.0% 8 Country-Y 7 Initial Value 2,000.00 ($50 – $10,000) 4 Growth Rate: 1% 0.1% 10.0% 1 35.4 yrs. E CALCULATIONS 10 15 20 25 30 35 40 Years Value in Country-X Country-Y 10 years $1,343.92 $2,209.24 20 years $1,806.11 $2,440.38 Country-X Country-Y 30 years $2,427.26 $2,695.70 Instructions: Modify the settings in the interactive tool as needed to answer the questions below. Suppose country X currently produces $1800 of goods and services per year with a constant growth rate of 4.8% per year. Country Y's production is currently $4500 with growth of 3.0% per year. a) Using the rule of 72, how long does it take for country X's production to double? years b) Using the rule of 72, how long does it take for country Y's production to double? years c) Even if an intersection point does not appear on the graph, will the production level of the two countries ever equal? OYes, smaller countries always catch up to larger countries, regardless of growth rates. ONo, since they don't intersect on the graph we can't know what happens in future years. ONo, the initial value is too large, the country with lower production cannot grow fast enough. OYes, the smaller production country's larger growth rate allows the country to catch up. d) After 60 years, how many times will country X's production have doubled? (Round down to a whole number) e) After 60 years, how many times will country Y's production have doubled? (Round down to a whole number) f) Given your answers to the previous two questions, will the two countries' productions have crossed within 60 years? Oyes Ono rev: 07 05 2021 Q C CS-268219
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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