Answered: Real Income per Person in 1960 Real…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The following table shows levels of real income per person in several economies during the years 1960 and 2010. The table further shows the average annual growth rate for each economy over this time period. For instance, real income per person in Senegal was $1,567 in 1960, and it actually declined to $1,480 by 2010. Senegal's average annual growth rate during this period was -0.11%, and it featured the lowest level of real income per person of any economy listed in the table in the year 2010.

The levels of real income per person are reported in U.S. dollars using a base year of 2005. The following exercises will provide insight into the different growth experiences of these nations.

Questions:

1. This economy experienced the fastest rate of growth in real income per person from 1960 to 2010.

a. Austria

b. China

c. France

d. India

e. Senegal

f. Singapore

2. This economy had the highest level of real income per person in the year 2010.

a. Austria

b. China

c. France

d. India

e. Senegal

f. Singapore

3. Consider the following four nations listed below. Which economy started 1960 with a level of real income per person of well below that of France and grew fast enough to catch up with and surpass France's real income per person by 2010?

a. Austria

b. India

c. Senegal

d. Singapore

Real Income per Person in 1960 Real Income per Person in 2010
China
Economy
Austria
France
405
(Dollars)
(Dollars)
Annual Growth Rate
(Percent)
9,773
35,031
2.59
9,396
29,145
2.29
8,727
6.33
Singapore
3,170
42,360
5.32
India
734
2,644
2.60
Senegal
1,567
1,480
-0.11

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

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