Y=F (K, L) = AK0.3L0.7CountryL (millions)K (trillions) Y (GDP)X780.261.1Y1000.841.6 12. Calculate per capita income for both countries. Express the answer in thousands.13. Which of the four government policies to stimulate saving is essential? That is,which policy can on its own, regardless of the other policies, determine the level of the nationalsaving rate?14. How does the centrality of institutions and property rights in economic growth help toexplain the predominance of rich countries in temperate climates and of poor countries inthe tropics?

Answered: 12. Calculate per capita income for…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter20: Economic Growth

Section: Chapter Questions

Problem 20RQ: For a high-income economy like the United States, what aggregate production function elements are...

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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?
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estion 30 A country with neither population growth nor technological progress is nitaly in the golden-rule steady state. Carefuly ilustrate this situation using a graph with output per worker, investment per worker, and depreciation per worker on the vertical axis and capital per worker on the horizontal axis. Now suppose climate change increases the depreciation rate. If the country adjusts its saving rate to reach the new golden- rule steady state, is it possible to determine how output per worker and consumption per worker in the new steady state compare to their levels in the initial steady state? Explain.
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Suppose that U.S. real GDP per capita is $50,000 and grows on average at 3% per year. How long will it take for U.S. real GDP per capita to double at this growth rate? If this growth rate continues, what will U.S. real GDP r capita be in 70 years? S Suppose that U.S. real GDP per capita is $50,000 and grows on average at 5% per year (rather than 3% a year) How long will it take for U.S. real GDP per capita to double at this growth rate? years (round to nearest year) If this growth rate continues, what will U.S. real GDP per capita be in 70 years? S years (round to nearest year)
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Country	L (millions)	K (trillions)	Y (GDP)
X	78	0.26	1.1
Y	100	0.84	1.6