Spain's current real GDP (YO) is €326 billion, and grows at a constant rate of 1.1%. Portugal's current real GDP is smaller (€55 billion), but they are experiencing a constant 4.8% growth rate. Part a) Calculate the real GDP for both countries 30 years, 50 years and 70 years from now. Allow the calculator to carry decimals in your intermediate calculations, but round GDP to the nearest billion Euro. Use these rounded values throughout the rest of the problem. Part b) Calculate the percentage difference in real GDP between the two countries for each 20-year interval. Report your answer in percentage form, rounded to the nearest integer. Part c) Suppose Portugal's goal is to catch up to Spain's GDP in 25 years. What growth rate must they sustain each year if they are to accomplish their goal? Express your answer as a percentage, rounded to one decimal place.

Spain's current real GDP (YO) is €326 billion, and grows at a constant rate of 1.1%. Portugal's current real GDP is smaller (€55 billion), but they are experiencing a constant 4.8% growth rate. Part a) Calculate the real GDP for both countries 30 years, 50 years and 70 years from now. Allow the calculator to carry decimals in your intermediate calculations, but round GDP to the nearest billion Euro. Use these rounded values throughout the rest of the problem. Part b) Calculate the percentage difference in real GDP between the two countries for each 20-year interval. Report your answer in percentage form, rounded to the nearest integer. Part c) Suppose Portugal's goal is to catch up to Spain's GDP in 25 years. What growth rate must they sustain each year if they are to accomplish their goal? Express your answer as a percentage, rounded to one decimal place.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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