Economics (Irwin Economics)
21st Edition
ISBN: 9781259723223
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Chapter 28, Problem 1RQ
To determine
Required number of years to make the GDP double.
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Economics (Irwin Economics)
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- 14)Suppose that the annual rates of growth of real GDP of Econoland over a five-year period are as follows: Year Growth Rate (%) 1 3 2 1 3 – 2 4 4 5 5 Instructions: Round your answers to 2 decimal places. a. What was the average of these growth rates in Econoland over these 5 years? b. What term would economists use to describe what happened in year 3? (Click to select) Expansion 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 the average growth rate?arrow_forwardSuppose 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_forward16)A mathematical approximation called the rule of 70 tells us that the number of years that it will take something that is growing to double in size is approximately equal to the number 70 divided by its percentage rate of growth. Thus, if Mexico’s real GDP per person is growing at 7 percent per year, it will take about 10 years (= 70/7) to double. Apply the rule of 70 to solve the following problem. Real GDP per person in Mexico in 2005 was about $11,000 per person, while it was about $44,000 per person in the United States. If real GDP per person in Mexico grows at the rate of 4 percent per year, about how long will it take Mexico’s real GDP per person to reach the level that the United States was at in 2005? (Hint: How many times would Mexico’s 2005 real GDP per person have to double to reach the United States’ 2005 real GDP per person?) Instructions: Enter your answer as a whole number.arrow_forward
- 4. How is GDP per capita calculated differently from labor productivity? 5. How do gains in labor productivity lead to gains in GDP per capita? 6. What is an aggregate production function? 7. What is capital deepening? 8. What do economists mean when they refer to improvements in technology? 9. For a high-income economy like the United States, what aggregate production function elements are most important in bringing about growth in GDP per capita? What about a middle-income country such as Brazil? A low- income country such as Niger? 10. List some arguments for and against the likelihood of convergence. 11. Say that the average worker in Canada has a productivity level of $30 per hour while the average worker in the United Kingdom has a productivity level of $25 per hour (both measured in U.S. dollars). Over the next five years. say that worker productivity in Canada grows at 1% per year while worker productivity in the UK grows 3% per year. After five years, who will have the higher…arrow_forwardSuppose that 10 workers were required in 2010 to produce 40,000 bushels of wheat on a 1,000-acre farm. a. What is the average output per acre? Per worker? b. If in 2020 only 8 workers produce 44,000 bushels of wheat on that same 1,000-acre farm, what will be the average output per acre? Per worker? c. By what percentage does productivity (output per worker) increase over those 10 years? Over those 10 years, what is the average annual percentage increase in productivity?arrow_forwardQUESTION 3 What was the approximate level of GDP production in the United States in 2015? Oa. $18 trillion O b. $1.8 trillion O c. $180 billion O d. $1,800 million Oe. $18 billionarrow_forward
- Why dues productivity growth in high-income economies not slow down as it runs into diminishing returns from additional investments in physical capital and human capital? Does this show one area where the theory of diminishing returns fails to apply? Why or why not?arrow_forwardSuppose 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?arrow_forwardAlthough economic growth is typically measured by calculating the rate of changein real GDP, there are a few problems associated with the use of GDP as ameasure of economic growth.Identify these problems.(4)Q.3.2 Economic growth can originate from the demand side or from the supply side ofthe economy. Discuss the sources of economic growth on the demand side.arrow_forward
- 3) Suppose that Alpha and Omega have identically sized working-age populations but that total annual hours of work are much greater in Alpha than in Omega. This could happen because more of Alpha’s labor force is unemployed, or Omega workers place a lower value on leisure than those in Alpha. Omega’s labor force is underemployed, or Omega workers place a higher value on leisure than those in Alpha. Alpha’s labor force is underemployed, or Omega workers place a higher value on leisure than those in Alpha. more of Omega’s labor force is unemployed, or Omega workers place a lower value on leisure than those in Alpha.arrow_forwardIf Ford produced $80 million worth of cars in 2020 in the United States but sold only $55 million worth of cars. US GDP in 2020 will include million worth of cars. O $55 O $80 $45 O $135arrow_forwardLearning Outcomes Covered: LO 2. Explain how the following key aggregate economic variables are defined and measured: the price level, national income, employment, unemployment, the labor force, the unemployment rate, the rate of inflation, the exchange rate. LO3. Understand how national expenditure and national product are measured and how the equilibrium level of national income is achieved. Graduate Attributes: Effective communication (1) Scholastic rigor and practical competence (2) Lifelong Learning (4) Autonomy and Accountability (5)arrow_forward
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