/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q. 32 An economy starts off with a GDP... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 20: Q. 32 (page 497)

An economy starts off with a GDP per capita of $5,000. How large will the GDP per capita be if it grows at an annual rate of 2% for 20 years? 2% for 40 years? 4% for 40 years? 6% for 40 years?

Short Answer

Expert verified

2% for 20 years- $7429.74

2% for 40 years- $11040.20

4% for 40 years- $24005.103

6% for 40 years- $51428.59

Step by step solution

01

Step1. Introduction

The Gross Domestic Product (GDP) can be defined as the value of all the final goods and services produced in a geographical boundary during a given period.

02

Step2. Calculation

Basic formula-

(1+x%)^n * GDP

n- number of years

GDP- initial/base

2% for 20 years- $7429.74

= (1+0.02)^20 * 5000

=$7429.74

2% for 40 years- $11040.20

=(1+0.02)^40 * 5000

=$11040.20

4% for 40 years- $24005.103

=(1+0.04)^40 * 5000

=$24005.103

6% for 40 years- $51428.59

=(1+0.06)^40 * 5000

=$51428.59

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

What sorts of policies can governments implement to encourage convergence?

Change in labor productivity is one of the most-watchedinternational statistics of growth. Visit the St.Louis Federal Reserve website and find the data section (http://research.stlouisfed.org). Find international comparisons of labor productivity, listed under the FRED Economic database (Growth Rate of Total Labor Productivity), and compare two countries in the recent past. State what you think the reasons for differences in labor productivity could be.

What do the growth accounting studies conclude are the determinants of growth? Which is more important, the determinants or how they are combined?

Refer back to the Work It Out about Comparing the Economies of Two Countries and examine the data for the two countries you chose. How are they similar? How are they different?

Explain the difference between property rights and contractual rights. Why do they matter to economic growth?
See all solutions

Recommended explanations on Economics Textbooks

Taxation Economics

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.