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- 2. (a) A country's current GDP is $1,000. Its annual growth rate is expected to average 5% over the next 10 years. What's its expected GDP in 10 years? (b) Explain the Rule of 70. Be sure to include a numerical example in your answer.4. In 1900, Per-Capita GDP in Japan was $2000. In 2017 it was $47,000. (a) Calculate the growth rate in per-capita GDP over this period. (b) If this growth rate continues, what will Japan's PC GDP be 50 years from now ?10. When did the U.S. economy recover to the same GDP level just prior to the Covid-19 pandemic. (a) In the first quarter of 2021 before any of President Biden's policies were implemented. (b) Only after President Biden's policies were implemented in the second quarter of 2021 (c) Only in 2022. (d) We have still not reached the 2019 level of GDP.
- Is it possible for GDP to rise while at the same time per capita GDP is falling? Is it possible for GDP to fall while per capita GDP is rising?3. The country of Patagonia has produced the following quantity of gauges and potatoes, with the price of each listed in dollar terms. Year 1 Year 1 Year 2 Year 2 Quantity Price Quantity Price Gauges 8,000 $4 10,000 $3 Potatoes 6,000 $8 5,000 $14 (a) Using Year 1 as the base year, what is the growth rate of real GDP from Year 1 to Year 2? (b) Based on the GDP deflator, what is the inflation rate from Year 1 to Year 2?Problem 2 Assume that total output is determined by the formula: Total Output = Number of Workers x Productivity (a) If the workforce is growing by 1 percent a year but productivity doesn’t improve, how fast can output increase? (b) If productivity increases by 3 percent and the number of workers increases by 1 percent a year, how fast will output grow?
- 4. Consider an economy that produces two different types of goods: apples and oranges. Assume that apple production rises 3% in 2013 (relative to 2012) and orange production rises 4% in 2013. Which of the following statements is TRUE? a) Nominal GDP growth is positive b) Real GDP growth is less than 3% c) Real GDP growth is between 3% and 4% d) Nominal GDP growth is zero.4. To what extent might the economic growth rates understate or overstate economic well-being? 1) The growth rate may (understate, overstate ) the improvements in products and services. 2) The growth rate may (understate, overstate ) the gain in economic well-being such as added leisure. 3) If growth debases the physical environment and creates a stressful work environment, the growth rate will (understate, overstate ) the gains in economic well-being that result from growth.4. You have been hired to forecast future population level for a small country. You know that this country currently has 15 million citizens and wishes to achieve a population level twice the current population, 50 years from now. (a) What population growth rate must it maintain in order to achieve this goal? (b) What if this country chooses a goal of 36 million people? What population growth rate would that require?
- 4. U.S. real GDP is significantly higher than it was 60 years ago . What does this imply ( if anything ) about the happiness and well - being of each person in the United States?8. When countries experience a rise in income over time which of the following sectoral changes is most likely to occur? A. The car manufacturing sector's output as a % of GDP will decrease B. The tourism sector's output as a % of GDP will increase C. The consumer electronics sector's output as a % of GDP will decrease D. The agricultural sector's output as a % of GDP will increase 7. The demand for coffee from a local coffee shop has an income elasticity of +0.6. After an 8% rise in average incomes the demand for the coffee sold by the coffee shop is expected to: A. Increase by 4.8% Decrease by 4.8% B. C. Increases by 13.3% D. Decrease by 13.3% 8. The diagram shows the market for second-hand cars in a recession when real incomes are falling. From the information in the diagram the most likely conclusion that can be made is: A. The price of new cars has fallen B. The price of second-hand cars has fallen C. The YED of second-hand cars is negative D. Second-hand cars are normal goods 9.…14)Suppose that the annual rates of growth of real GDP of Econoland over a five-year period are as follows: Year Growth Rate (%) 1 3 2 1 3 – 2 4 4 5 5 Instructions: Round your answers to 2 decimal places. a. What was the average of these growth rates in Econoland over these 5 years? b. What term would economists use to describe what happened in year 3? (Click to select) Expansion Recession c. If the growth rate in year 3 had been a positive 2 percent rather than a negative 2 percent, what would have been the average growth rate?