Answered: question 1 Suppose that work hours in…

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 1

Suppose that work hours in New Zombie are 200 in year 1 and productivity is $8 per hour worked.

What is New Zombie’s real GDP?

If work hours increase to 210 in year 2 and productivity rises to $10 per hour, what is New Zombie’s rate of economic growth?

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the 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.

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Countries construct a measure of GDP called real GDP that accounts for price level changes to identify growth in the number of goods and services a country produces from increases in GDP driven by price changes. The market value of final output measured in current prices is referred to as nominal GDP, while the value of final output measured in constant prices is referred to as real GDP.

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