### Economic Growth and Income Levels: Comparative Analysis#### Instructions:Review the table below to determine which economy corresponds to each statement regarding real income levels and growth rates.#### Statements and Economies:1. **This economy had the highest level of real income per person in the year 2010.** - Options: - Austria - Botswana - Honduras - Malaysia - Venezuela - Zambia2. **This economy experienced the fastest rate of growth in real income per person from 1960 to 2010.** - Options: - Austria - Botswana - Honduras - Malaysia - Venezuela - Zambia#### Explanation:For each statement, select the economy that best aligns with the described economic condition. Assess historical data and growth trends to make informed choices. Consider both absolute income levels and relative growth rates over the specified periods. ### 1. Economic Growth Around the WorldThe following table presents data on real income per person for various economies in the years 1960 and 2010. It also includes each economy's average annual growth rate over this period. For instance, Zambia's real income per person was $1,412 in 1960, declining to $1,309 by 2010. Zambia experienced an average annual growth rate of -0.15%, making it the poorest economy in the table in 2010.The real income-per-person figures are denominated in U.S. dollars, based on the year 2005. The following exercises will aid in understanding the varied growth experiences of these economies.| Economy | Real Income per Person in 1960 (Dollars) | Real Income per Person in 2010 (Dollars) | Annual Growth Rate (Percent) ||----------|----------------------------------------|----------------------------------------|---------------------------------|| Austria | 9,773 | 35,031 | 2.59 || Venezuela| 7,307 | 9,762 | 0.58 || Botswana | 468 | 9,515 | 6.21 || Malaysia | 1,624 | 11,863 | 4.06 || Honduras | 1,932 | 3,146 | 0.98 || Zambia | 1,412 | 1,309 | -0.15 |This table offers insights into the economic progression of each listed country over a fifty-year period, highlighting the diverse growth trajectories.

Real income is the income of individuals after adjusting the rate of inflation. It is estimated by dividing nominal income by prices. Real variables like real income are estimated in physical units whereas the nominal variables such as nominal income are measured in monetary terms. Therefore, as per the economists, real income is a better and more useful indicator of well being as it measures the number of services or goods that can be purchased with the income. The annual growth rate is the change in the value for the year.Here, in the given question, there is the real income per person for many economies in the years 1960 and 2010 along with the average annual growth rate of the economy. The annual growth rate is highest in the case of Botswana with 6.21% whereas it is lowest for Zambia. If we analyze the real income per person for 2010, then Austria has the highest real income per person with $9,773 whereas Botswana has the lowest at $468. Similarly, in 2010, the real income per person is highest for Austria with $35,031 whereas the lowest is for Zambia that is $1,309. Therefore, the economy which has gained the fastest growth rate in real income per person from 1960-2010 is Botswana that grew at the average rate of 6.21%. The economy which had the highest real income per person in the year 2010 is Austria with $35031.

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Indicate which economy satisfies each of the following statements. Statement Austria Botswana Honduras Malaysia Venezuela Zambia This economy had the highest level of real income per person in the year 2010. This economy experienced the fastest rate of growth in real income per person from 1960 to 2010.

Indicate which economy satisfies each of the following statements. Statement Austria Botswana Honduras Malaysia Venezuela Zambia This economy had the highest level of real income per person in the year 2010. This economy experienced the fastest rate of growth in real income per person from 1960 to 2010.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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