PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 7, Problem 2P
(a)
To determine
Determine the value of labor productivity after 20 years.
(b)
To determine
Determine the value of labor productivity after 20 years if the growth rate declines.
(c)
To determine
Compare the labor productivity for different growth rates.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The following table reports real income per person for several different economies in the years 1960 and 2010. It also gives each economy's average annual growth rate during this period. For example, real income per person in Zambia was $1,412 in 1960, and it actually declined to $1,309 by 2010. Zambia's average annual growth rate during this period was -0.15%, and it was the poorest economy in the table in the year 2010.
The real income-per-person figures are denominated in U.S. dollars with a base year of 2005. The following exercises will help you to understand the different growth experiences of these economies.
Economy
Real Income per Person in 1960 (Dollars)
Real Income per Person in 2010 (Dollars)
Annual Growth Rate (Percent)
Austria
9,773
35,031
2.59
Venezuela
7,307
9,762
0.58
Botswana
468
9,515
6.21
Malaysia
1,624
11,863
4.06
Honduras
1,932
3,146
0.98
Zambia
1,412
1,309
-0.15
Indicate which economy satisfies each of the following…
Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one can of soda, one bag of chips, and one comic book. In year one, the basket costs $7.00.
In year two, the price of the same basket is $6.00. From year one to year two, there is at an annual rate of .
In year one, $21.00 will buy baskets, and in year two, $21.00 will buy baskets.
This example illustrates that, as the price level falls, the value of money .
Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one can of soda, one bag of chips, and one comic book. In year one, the basket costs $9.00.
In year one, $72.00 will buy(0.11, 0.13, 4.5, 8, 9) baskets, and in year two, $72.00 will buy (0.11, 0.13, 4.5, 8, 9) baskets.
.
Chapter 7 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
Knowledge Booster
Similar questions
- Assume that there are three industries in the Home country: industry A, industry B and industry C. Total labour force of the Home Country in the year 2015 was 75,000. 25,000 of this labour force were employed in industry A, 25,000 of it were employed in industry B, and the rest were employed in industry C. In year 2016, total labour force was 150,000. This time 50,000 were employed in industry A, 50,000 were employed in industry B and the remaining workers were employed in industry C. What is the industrial transformation for the Home Country? (a)0. (b)1/2. (c)1/6. (d)4/15. Show your calculation and explain it. Limit your explanation to 200 words.arrow_forwardSuppose that the average annual rate of population increase in Econland in recent years was about 2 percent. Based on this rate of growth, the population of Econland will double in about 35 years. 11 years. 7 years. 46 years.arrow_forwardWhich of the following is a true statement? Multiple Choice Economists who support economic growth say that it is the most practical route to the higher standards of living that the vast majority of people desire. Most economists believe that the recent rise in the average rate of productivity growth implies an end to the business cycle. Most economists believe that increases in real GDP actually produce decreases in overall economic well-being because of spillover costs. Mainstream economists disagree as to whether the rate of productivity growth was higher between 1995 and 2012 or between 1973 and 1995.arrow_forward
- Suppose that, in year 1, an economy produces 200 golf balls that sell for $3 each and 75 pizzas that sell for $8 each. The next year, the economy produces 210 golf balls that sell for $3.50 each and 80 pizzas that sell for $9 each. Using year 1 as the base year, the growth rate of real GDP from year 1 to year 2 is ____%arrow_forwardExponential growth implies that ________. growth rates can only be positive growth rates will alternate between positive and negative values in every consecutive time period relatively large differences in growth rates will translate into small differences in the level of a quantity after many years of growing relatively small differences in growth rates will translate into large differences in the level of a quantity after many years of growingarrow_forwardThe 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.…arrow_forward
- Q7 MCQ _________ is calculated by taking _________ and then subtracting the value of how much physical capital is worn out, or reduced in value because of aging, over the course of a year. GNP; NNP NNP; GNP GDP; NNP NNP; GDParrow_forward20 Macroeconomic Information for Mexico: 2020 Q2 GDP (in 2020 Q2 pesos) 4.97 trillion pesos 2020 Q1 GDP (in 2020 Q1 pesos) 6.09 trillion pesos 2020 Q2 GDP (in 2015 pesos) 3.76 trillion pesos 2020 Q1 GDP (in 2015 pesos) 4.54 trillion pesos Calculate Mexico's real GDP growth rate between the first and second quarters of 2020. (Enter your answer in percent form, rounded to one decimal place, without the percent sign. For example, if your answer is 0.12345, enter 12.3.) 21 Macroeconomic Information for Mexico: 2020 Q2 GDP (in 2020 Q2 pesos) 4.97 trillion pesos 2020 Q1 GDP (in 2020 Q1 pesos) 6.09 trillion pesos 2020 Q2 GDP (in 2015 pesos) 3.76 trillion pesos 2020 Q1 GDP (in 2015 pesos) 4.54 trillion pesos Calculate Mexico's inflation, using the GDP deflator method, between the first and second quarters of 2020. (Enter your answer in percent form, rounded to one decimal place, without the percent sign. For example, if your…arrow_forwardAssume there are two countries: South Korea and the United States. South Korea grows at 4% and the United States grows at 1%. For the sake of simplicity, assume they both start from the same fictional income level, $10,000. What will the incomes of the United States and South Korea be in 20 years? By how many multiples will each country’s income grow in 20 years?arrow_forward
- The government of a small island country is concerned about a few things and has hired you as an economic consultant to do some economic analysis for 2020. First, the government is worried that the inflation rate in the country is too high. This could reduce the purchasing power and the standards of living of the residents. Second, it suspects that the residents are importing too much goods and services from foreign countries. This could result in unemployment in the island. Third, and finally, it fears that the entrepreneurs are making too much profit and this could lead to unrest in the country. The government has been able to calculate the following statistics (converted to dollars), which you will use to carry out your assignment. All the data pertain to 2020. All the numbers except for real GDP are in nominal terms. The base year in this country for the calculation of real GDP is 2019. GDP Information: Nominal GDP = $106,000,000 Real GDP = $100,000,000 Expenditures: Consumption =…arrow_forwardThe government of a small island country is concerned about a few things and has hired you as an economic consultant to do some economic analysis for 2020. First, the government is worried that the inflation rate in the country is too high. This could reduce the purchasing power and the standards of living of the residents. Second, it suspects that the residents are importing too much goods and services from foreign countries. This could result in unemployment in the island. Third, and finally, it fears that the entrepreneurs are making too much profit and this could lead to unrest in the country. The government has been able to calculate the following statistics (converted to dollars), which you will use to carry out your assignment. All the data pertain to 2020. All the numbers except for real GDP are in nominal terms. The base year in this country for the calculation of real GDP is 2019.arrow_forwardRichland’s real GDP per person is $10,000 and Poorland’s real GDP per person is $5,000. However Richland is growing at 1% per year and Poorland is growing at 3% per year. Compare real GDP per person after 20 years and after 40 years. Please enter your answers as numerical responses rounded to the nearest dollar, and do not type out your answer as words. (ie. $13,452 not "Thirteen thousand four hundred fifty-two dollars"). What is Richland's Real GDP after 20 years? What is Richland's Real GDP after 40 years? What is Poorland's Real GDP after 20 years? What is Poorland's Real GDP after 40 years?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
