Country A’s real GDP per capita is $4,000 today, but it is constantly growing at 5% per year. Country B’s current real GDP per capita is $16,000, but it is constantly growing at 2% per year. Will the standard-of-living in Country A ever catch-up with or overtake Country B? If so, when would it happen? Provide your analysis

Country A’s real GDP per capita is $4,000 today, but it is constantly growing at 5% per year. Country B’s current real GDP per capita is $16,000, but it is constantly growing at 2% per year. Will the standard-of-living in Country A ever catch-up with or overtake Country B? If so, when would it happen? Provide your analysis

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Country A’s real GDP per capita is $4,000 today, but it is constantly growing at 5%
per year. Country B’s current real GDP per capita is $16,000, but it is constantly growing at 2% per year. Will
the standard-of-living in Country A ever catch-up with or overtake Country B? If so, when would it happen?
Provide your analysis

Definition Video Definition Overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period. Video

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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)
Nominal GDP (NGDP) Real GDP (RGDP) Estimated Resident Population by Age and Sex (1991+) (Annual-Mar) 3,970,000 4,044,900 4,101,300 4,148,000| 4,196,700 4,235,300 4,271,000 4,317,900 4,362,800 4,392,500 4,417,700 Data 2003 135,181 3,970,000 2004 144,502 4,044,900 2005 154,559 4,101,300 2006 162,937 172,004 4,148,000 2007 4,196,700 2008 186,673 4,235,300 2009 189,406 4,271,000 2010 194,306 4,317,900 Pad 2011 203,342 Page 4,362,800 4,392,500 4,417,700 2012 213,025 2013 217,489
Select and analyze global productivity trends from 1970 to the present year. Describe the GDP per capita trend for each country. Compare these trends across the different income levels represented. Identify any significant trend changes and hypothesize possible causes related to events or policies.
Suppose that the average annual rate of population increase in Econland in recent years was about 2 percent. Based on this rate of growth, the population of Econland will double in about 35 years. 11 years. 7 years. 46 years.
The economic activity of a country is often quantified as the gross domestic product (GDP), which is the sum of private and government consumption, investments, and net exports (the value of exports minus the value of imports). For a developed country such as the United States, economists might see a GDP growth rate of 3% a year as reasonable. However, production and consumption create some pollution. By how much would pollution per dollar of GDP have to decline for pollution levels 50 years from now to be the same as current levels, assuming a 3% annual growth rate of GDP? In 75 years? In 100 years? (Hint: Let the current pollution level be 1 and find out what the future pollution level would be).
Assume that a leader country has real GDP per capita of $40,000, whereas a follower country has real GDP per capita of $20,000. Next suppose that the growth of real GDP per capita falls to zero percent in the leader country and rises to 2 percent in the follower country. If these rates continue for long periods of time, how many years will it take for the follower country to catch up to the living standard of the leader country?