EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 24, Problem 1P
To determine
The annual growth rates of real GDP.
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Suppose that the annual rates of growth of real GDP of Econoland over a five-year period were sequentially as follows: 3 percent, 1 percent, −2 percent, 4 percent, and 5 percent. What was the average of these growth rates in Econoland over these five years? What term would economists use to describe what happened in year 3? If the growth rate in year 3 had been a positive 2 percent rather than a negative 2 percent, what would have been the average growth rate?
Suppose that the annual rates of growth of real GDP of Econoland over a five-year period were as follows:
Year
Growth Rate
1
4%
2
28
3
-2%
4
48
5
6%
What was the average of these growth rates in Econoland over these five years?
Instructions: Round your answer to one decimal place.
%
What term would economists use to describe what happened in year 3?
(Click to select)
If the growth rate in year 3 had been a positive 2 percent rather than a negative 2 percent, what would have been the average growth
rate?
1%
Suppose that the annual rates of growth of real GDP of Econoland over a five-year period were sequentially as follows: 3 percent, 1 percent, -2 percent, 4 percent, and 5 percent. What was the average of these growth rates in Econoland over these 5 years? What term would economists use to describe what happened in year 3?
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- Suppose that the annual rates of growth of real GDP in Econoland over a five-year period were as follows: Year Growth Rate (X) 1 2 1 3 -2 4 4 a. What was the average of these growth rates in Econoland over these five years? Instructions: Enter your answer rounded to 1 decimal place. percent b. What term would economists use to describe what happened in year 3? Recession c. If the growth rate in year 3 had been a positive 2 percent rather than a negative 2 percent, what would have been Econoland's average growth rate over the five years? Instructions: Enter your answer as a whole number. percentarrow_forwardSuppose that the annual rates of growth of real GDP in Econoland over a five-year period were as follows: Growth Rate (3) 5 Year 1 2 3 4 5 2 -2 4 5 a. What was the average of these growth rates in Econoland over these five years? Instructions: Enter your answer rounded to 1 decimal place. percent b. What term would economists use to describe what happened in year 3? Recession c. If the growth rate in year 3 had been a positive 3 percent rather than a negative 2 percent, what would have been Econoland's average growth rate over the five years? Instructions: Enter your answer rounded to 1 decimal place. percentarrow_forwardQuestion 17: Recall the discussion that we had in class about growth and the discrete equation of growth. As we all know, China's economy has already overtaken the US economy in terms of GDP@PPP (with it being almost $25T dollars for China vs. $20T dollars for the US in 2018). However, in terms of GDP@ER', the US economy is still running ahead of China's economy (with it being almost $20.5T dollars for the US vs. $13.5T dollars for China’s economy in 2018). According to the IMF forecasts, we can expect that the US GDP@ER will grow annually at the rate of 2.5% on average and that of China will grow annually at the rate of 6.5% on average in the next three decades. Please use the discrete formula of growth to find out how many years it will take for China's economy to overtake the US economy in terms of GDP@ER. a. 11 years b. 22 years с. 33 years d. 44 years е. 55 years f. 66 yearsarrow_forward
- Suppose that the annual rates of growth of real GDP in Econoland over a five-year period were as follows: Year Growth Rate (%) 1 2 3 -1 4 4 5 6 a. What was the average of these growth rates in Econoland over these five years? Instructions: Enter your answer rounded to 1 decimal place. percent b. What term would economists use to describe what happened in year 3? |(Click to select) ♥ c. If the growth rate in year 3 had been a positive 5 percent rather than a negative 1 percent, what would have been Econoland's average growth rate over the five years? Instructions: Enter your answer rounded to 1 decimal place. percentarrow_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_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? The quantity of labor and increases in labor productivity are important sources of economic growth. Between 1953 and 2015, in the US economy the labor force increased from 63 million to 158 million workers. Productivity growth has usually been the more significant factor. To calculate real GDP in a given year you have to multiply hours worked by productivity. Suppose that New Zombie has adopted the framework used by the US Bureau of Labor Statistics to calculate its labor force statistics. Following information is extracted from a…arrow_forward
- Suppose that the annual rates of growth of real GDP in Econoland over a five-year period were as follows: Year Growth Rate (%) 1 4 2 2 3 -1 4 4 5 6 a. What was the average of these growth rates in Econoland over these five years? ________ percent b. What term would economists use to describe what happened in year 3? c. If the growth rate in year 3 had been a positive 4 percent rather than a negative 1 percent, what would have been Econoland's average growth rate over the five years? __________ percentarrow_forwardOver many years, small differences in growth rates can have large effects on the level of income. This question will help you understand this important point. Consider an initial value of real GDP equal to Yo. If real GDP grows at a rate of g percent annually, after N years real GDP will equal Yo(1+g). Now consider the following table. Let the initial level of GDP in all cases be 100. a. By using the formula provided above, compute the level of real GDP in column 1 for each year. For example, in Year 1, real GDP will equal 100x (1.01)¹=101. For each year, compute the GDP. Complete the rest of the columns. (Round your responses to two decimal places.) b. In year 20, how much larger (in percentage terms) is real GDP in the 2.0-percent growth case compared with the 1.5-percent growth case? Real GDP in the 2.0-percent growth case is% larger. (Round your response to the nearest whole number.) c. In year 50, how much larger is real GDP in the 2.0-percent growth case compared to the…arrow_forwardThere is a chart for quesition 2 that is attached as an image. Suppose 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? Hint: The quantity of labor and increases in labor productivity are important sources of economic growth. Between 1953 and 2015, in the US economy the labor force increased from 63 million to 158 million workers. Productivity growth has usually been the more significant factor. To calculate real GDP in a given year you have to multiply hours worked by productivity. 2. Suppose that New Zombie has adopted the framework used by the US Bureau of Labor Statistics to calculate its…arrow_forward
- Year Real GDP Nominal GDP 2019 $15,510.79 $17,310.70 2020 $17,495.23 $18,761.83 2021 $18,209.59 $19,253.97 Refer to the table above. What is the growth rate in real GDP from 2020 to 2021? 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_forward#1: A lower income economy starts off with a per capita GDP of $5,000. How large will the per capita GDP be if it grows at an annual rate of 2% for 10 years? 2% for 30 years? 4% for 10 years? 4% for 30 years? Explain why the difference between 2% and 4% growth matters? #2: List some arguments for and against the likelihood of “convergence”. What sorts of policies can governments implement to encourage convergence? #3: What determines how productive workers are? How do gains in labor productivity lead to gains in GDP per capita?arrow_forward“Since 1980, aggregate per capita GDP in sub-Saharan Africa has declined at almost 1 percent per annum. The decline has been widespread: 32 countries are poorer now than in 1980. Today, sub-Saharan Africa is the lowest-income region in the world...It is clear that Africa has suffered a chronic failure of economic growth. The problem for analysis is to determine the causes” (Collier and Gunning 1999: ‘Why has Africa grown slowly?’). Explain the possible reasons why sub-Saharan Africa grew so slowly from 1980- 1999?arrow_forward
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