4 Question 10Consider the following two scenarios.Scenario 1 - Uninterrupted GrowthPer capita GDP starts at $823 and grows by 6.1% each year for 4 years. Then it continues to grow at6.1% for 61 more years.Scenario 2 - A Depression Before GrowthPer capita GDP starts at $823 but a recession lasting for 4 years shrinks GDP per capita by 20% foreach of those years. Then the economy recovers and grows by 6.1% for the next 61 years.How much lower is per capita GDP at the end of Scenario 2 compared to Scenario 1?Note: If the Great Depression never happened, and the U.S. experienced normal growth over those yearsinstead, GDP per capita today might be as high as $180,000. Since our GDP per capita is more like$60,000 today, that means we have $120,000 less per person today because of the Depression. So, withthose numbers, my answer to this question would be "120,000".TL;DR - Enter your answer as a positive number, not a negative one.Round your final answer to two decimal places.

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Consider the following two scenarios. Scenario 1 - Uninterrupted Growth Per capita GDP starts at $823 and grows by 6.1% each year for 4 years. Then it continues to grow at 6.1% for 61 more years. Scenario 2 - A Depression Before Growth Per capita GDP starts at $823 but a recession lasting for 4 years shrinks GDP per capita by 20% for each of those years. Then the economy recovers and grows by 6.1% for the next 61 years. How much lower is per capita GDP at the end of Scenario 2 compared to Scenario 1?

Consider the following two scenarios. Scenario 1 - Uninterrupted Growth Per capita GDP starts at $823 and grows by 6.1% each year for 4 years. Then it continues to grow at 6.1% for 61 more years. Scenario 2 - A Depression Before Growth Per capita GDP starts at $823 but a recession lasting for 4 years shrinks GDP per capita by 20% for each of those years. Then the economy recovers and grows by 6.1% for the next 61 years. How much lower is per capita GDP at the end of Scenario 2 compared to Scenario 1?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter20: Economic Growth In The Global Economy

Section: Chapter Questions

Problem 2P

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