Question

Suppose that every ​$566 billion of dead capital reduces the average rate of growth in worldwide...

Suppose that every ​$566 billion of dead capital reduces the average rate of growth in worldwide per capita real GDP by 0.3 percentage points.

If there is ​$8 trillion in dead capital in the​ world, calculate by how many percentage points the existence of dead capital will reduce average worldwide growth of per capita real GDP. ___ percent.

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Answer #1

There is $8 trillion in dead capital. This means that there is $8,000 billion in dead capital.

It has been provided that,

$566 billion in dead capital reduces the average rate of growth in worldwide per capita real GDP by 0.3%

$1 billion in dead capital reduces the average rate of growth in worldwide per capita real GDP by [0.3/566]%

$8,000 billion in dead capital reduces the average rate of growth in worldwide per capita real GDP by [(0.3/566) * 8,000] 4.24%

Thus,

The $8 trillion in dead capital will reduce the average worldwide growth of per capita real GDP by 4.24 percent.

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