Question

**Long-Run Economic Growth – End of Chapter
Problems**

**2**. The accompanying table shows the average
annual growth rate in real GDP per capita for Argentina, Ghana, and
South Korea, using data from World Bank, World Development
Indicators, for the past few decades.

**a.** For the 10-year periods indicated, use the
Rule of 70 to calculate how long it would take for that country’s
real GDP per capita to double. *Round your answers to one place
after the decimal point.*

Average annual growth rate of real GDP per capita (millions per year) |
|||
---|---|---|---|

Years | Argentina | Ghana | South Korea |

1965 – 1975 | 1.92% | -1.13% | 8.29% |

1975 – 1985 | -1.42 | -2.29 | 7.08 |

1985 – 1995 | 1.54 | 1.70 | 8.06 |

1995 – 2005 | 1.14 | 2.16 | 4.28 |

2005 – 2015 | 3.11 | 4.45 | 3.02 |

Argentina, using the average annual growth rate from 1995-2005:

Argentina's GDP will double in ? years.

Ghana, using the average annual growth rate from 1985-1995:

Ghana's GDP will double in ? years.

South Korea, using the average annual growth rate from 2005-2015:

South Korea's GDP will double in ? years.

Answer #1

Long-run economic growth requires all of the following
except
Select one:
a. government provision of secure property rights.
b. increases in capital per hour worked.
c. technological change.
d. political instability.
Potential GDP refers to
Select one:
a. the level of GDP attained by the country with the highest growth
in real GDP in a given year.
b. the level of GDP attained when all firms are producing at
capacity.
c. the extent to which real GDP is above or...

GDP per Capita Growth and Rule of 72
Current Year
Previous Year
Growth Rate
Real GDP
$8.4 trillion
$8.0 trillion
Population
202 million
200 million
GDP per Capita
$
$
Formulas you could use:
Growth Rate in percentage = (Current year value – previous year
value)/ previous year
GDP per Capita = Real GDP/population (Ch6 Section 6.4)
Future value = Present value x (1 + growth rate)^number of
years (Ch7 Section 7.2)
Rule of 72:
72/growth rate = number of...

The accompanying table shows data on nominal GDP (in billions of
dollars), real GDP (in billions of 2005 dollars), and population
(in thousands) of the United States in 1960, 1970, 1980, 1990,
2000, and 2010. The U.S. price level rose consistently over the
period 1960–2010.
Year Nominal GDP (billions of dollars) Real GDP (billions of
2005 dollars) Population (thousands)
1960 $526.4 $2,828.5 180,760
1970 1,038.5 4,266.3 205,089
1980 2,788.1 5,834.0 227,726
1990 5,800.5 8,027.1 250,181
2000 9,951.5 11,216.4 282,418
2010...

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14.58%
3.79%
0.79%
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The following table depicts statistics on GDP per capita (ie,
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A
B
C
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Average annual growth rate of real GDP per capita (Year
2000-2010)
GDP per capita (Year 2088)
High-income
38,293
0.9%
77024.76
Middle-income
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1. Suppose 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 5 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...

1. Economic growth around the world
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...

1. Economic growth around the world
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 the Central African Republic was
$1,010 in 1960, and it actually declined to $628
by 2010. The Central African Republic's average annual growth rate
during this period was -0.95%, and it was the poorest economy in
the...

Between 2000 and 2009, real output per person in the emerging
world grew at an average annual rate of 7.6%, 4.5 percentage points
higher than the rate seen in rich countries. As a result, the gap
between the developed and developing worlds narrowed quickly over
the period. Since 2009, growth rates in the developing world have
dropped and were only 1.1 percentage points higher than developed
countries in 2013. Projections for 2014 put growth in developing
countries just 0.39 percentage...

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