Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
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Chapter 6, Problem 3E
To determine
Calculate the growth rate.
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All values are 2005 dollars.
Part a) Calculate the growth of GDP/capita in each column.
Part b) Calculate the average annual growth in GDP/capita for japan, uk, and USA from 1980 to 2010 using the growth formula in the image. In the growth function, t is the current time period, t-j is the original time period, and g is the annual growth rate.
Part c) In parts a and b, are the calculated values for nominal gdp/capita or real gdp/capita. Explain why.
Starting from year 2023 and assuming that both the annual growth rates of
RGDP and population will remain at the levels in the table below, choose the
correct statement:
Average RGDP growth
Average population
Country
2010-2019 (%)
growth 2010-2019 (%)
China
7.68
0.56
India
6.62
1.23
Vietnam
6.58
1.02
Singapore 4.99
1.34
Data Source: World Bank
O India will double its real GDP per person in 2036.
Vietnam will double its real GDP per person in 2036.
O Singapore will double its real GDP per person in 2043, while China 10
years earlier.
O All the above
Suppose a country has a real GDP per capita of $68,000 and grows at a constant rate for the next 36 years. How much larger (in percentage terms) is this country if its growth rate is 4.33% instead of 3.13% after 36 years of growth? 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.
Chapter 6 Solutions
Macroeconomics (Fourth Edition)
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- How large will Canada’s GDP be in 25 years? The answer depends on what the rate of growth in GDP will be over that 25-year period. A mathematical formula we can use for this calculation is the following: GDP2041 = GDP2016 (1 + g)25 where GDP2041 is the level of GDP in the year 2041, GDP2016 is the level of GDP in the year 2016, and g is the rate of growth in GDP. Assume that GDP in 2016 is $1000 million and assume that the value of g is 0.035 (3.5 percent per year). What will be the value of GDP in 2041? Now suppose that the value of g is 0.040 (4.0 percent per year). What will be the value of GDP in 2041 given this slightly larger rate of growth? What does this result say about the importance of policies that promote even slightly faster rates of growth in GDP?arrow_forwardItaly is a relatively rich country with per-capita GDP of $28,000. India is a relatively poor with per-capita GDP of only $3,500. However, India is growing rapidly at a growth rate of 5% per year. We want to find how many years it will take for India's per capita GDP to equal Italy's current per-capita GDP of $28,000. How many times must India's per-capita GDP double in order to reach Italy's per-capita GDP?arrow_forwardYou are asked to perform a growth accounting analysis for Ethiopia to inform policy makers. Output growth in Ethiopia was 5% per year during the period 2012- 2022. Employment growth was 3% per year and capital was growing by 10% in the same period. Suppose that the capital share in income is 0.3 and that there are constant returns to scale. c) What was the annual growth rate of output per worker? Of capital per worker? d) What was the growth in total factor productivity (technical progress)?arrow_forward
- In 1960, per-capita GDP in Japan was 1/3 of that in the UK. By 1990, Japan and the UK had equal GDP per capita. From 1960 to 1990, the UK per-capita GDP grew at an average rate of 2.2% per year. Calculate the average annual growth rate of per- capita GDP in Japan over the same time period.arrow_forward5) Suppose that an economy starts off with a per capita real GDP of $5,000. How large will the per capita GDP of this country be if it grows at an annual rate of 6% for 40 years? Use compound growth rate formula. Show your calculations and the unit of account of your answer. Answer: 6) The graph below represents per-worker production functions for the same country. Answer the following questions using this graph. Real GDP per hour worked, Y/L $17,000 16,400 16,000 15,000 Production function3 B Production function2 E Production function1 a) Answer: $50,000 60,000 70,000 Capital per hour worked, K/L Which concept is illustrated by the movement from point A to B or from point B to C?arrow_forwardFill in the blank Italy is a relatively rich country with per-capita GDP of $28,000. India is a relatively poor with per-capita GDP of only $3,500. However, India is growing rapidly at a growth rate of 5% per year. We want to find how many years it will take for India’s per capita GDP to equal Italy’s current per-capita GDP of $28,000. How many times must India's per-capita GDP double in order to reach Italy's per-capita GDP? India's per-capita GDP must double ________________________ times. Use the rule of 70 to find how many years it will take for India's per-capita GDP to double once at a 5% growth rate.arrow_forward
- Using logarithmic form of this GDP production function compute the TFP contribution to GDP growth rate assumingalpha=0.4, beta=0.50 while GDP growth rate is 4.0 percent, capital stock growth rate is 5percent, labor growth 3percent and human capital growth 2 percent.arrow_forwardforecast about the average GDP growth for the next 3 years (2021-2023)? Explain and justify. So calculate the contributions of TFP to GDP growth in this years. assuming alpha = 0.4arrow_forwardIf real GDP per capita doubles between 2005 and 2020, what is the average growth rate of real GDP per capita? a)4.7% b)21% c)15% d)10.5%arrow_forward
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