**Economic Growth and Income Projection Analysis***Scenario:*Suppose that average incomes today were $50,588 and are expected to grow at 2.6% each year for the next 87 years. The president is considering a policy which would increase the growth rate to 4.3%.**Question:**How much higher would the average income be in 87 years if this policy is enacted?*Instructions:*Round your final answer to two decimal places.**Graph/Diagram Explanation:**This problem does not include any graphs or diagrams, but it involves understanding the impact of different annual growth rates on future income projections over a specified time period. Using exponential growth formulas, students can compare the outcomes of two different growth scenarios to determine the prospective benefit of the policy change.

Answered: Image /qna-images/answer/7b5f162e-d85e-449e-9dda-c95a92fbc53b.jpg

Suppose that average incomes today were $50,588 and are expected to grow at 2.6% each year for the next 87 years. The president is considering a policy which would increase the growth rate to 4.3%. How much higher would the average income be in 87 years if this policy is enacted? Round your final answer to two decimal places.

Suppose that average incomes today were $50,588 and are expected to grow at 2.6% each year for the next 87 years. The president is considering a policy which would increase the growth rate to 4.3%. How much higher would the average income be in 87 years if this policy is enacted? Round your final answer to two decimal places.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Suppose a country a real GDP of $159. What will the size of the GDP be after 14 years if the economy grows by 4.8% each year? Round your answer to two digits after the decimal without the dollar sign.
If a country has a per capita GDP of $4,200 and it grows at a 5% annual rate. How long will it take, in years, to double the standard of living in the country as measured by economists? (Round your answer to include 2 decimal places.)
The growth rate of real GDP in the United States rises from 4.2% to 4.4%. Explain and calculate how this increase in the growth rate of real GDP affects the number of years it will take for real GDP to double.
Suppose Botswana’s nominal GDP increases from $200 billion in 1998 to $250 billion in 1999. a) Explain why these figures may present a misleading measure of economic growth. b) What alternative method would provide a more accurate measure of economic growth over time ?
A nation's real GDP was $250 billion in Year 1 and $265 billion in Year 2. Its population was 120 million in Year 1 and 125 million in Year 2. What is its real GDP growth rate in Year 2? Multiple Choice 15.0 percent 6.0 percent 5.7 percent 1.1 percent
The Rule of 72 Small differences in annual growth rates cumulate into large differences in GDP. Shown here are the number of years it would take to double GDP at various growth rates. Doubling times can be approximated by the rule of 72. Seventy-two divided by the growth rate equals the number of years it takes to double. Growth Rate Doubling Time (percent) (years) 0.0 Never 0.5 144.0 1.0 72.0 48.0 36.0 28.8 20.6 20.6 18.0 16.0 14.4 13.1 12.0 11.1 10.3 9.6 9.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 China's output grew at an amazing rate of 8 percent per year from 2010 to 2014. a. At that rate how long would it take for China's GDP to double? b. With its population increasing at 0.6 percent per year, how long will it take for per capita GDP to double? years years
Country alpha and beta initially have the same real GDP per capita. Country Alpha experiences no economic growth, while Country Beta grows at a sustained rate of 10 percent. In 14 years, Country Beta's GDP will be approximately that of Country Alpha one-half double quadruple one-fourth
If the GDP (t) of Japan is $997.50B today and this country is expecting its GDP (t+1) to be $1,076.9 next year, what is the expected growth rate?
The following table reports real income per person for several different economies in the years 1960 and 2010. It also gives each economy's average annual growth rate during this period. For example, real income per person in Zambia was $1,412 in 1960, and it actually declined to $1,309 by 2010. Zambia's average annual growth rate during this period was -0.15%, and it was the poorest economy in the table in the year 2010. The real income-per-person figures are denominated in U.S. dollars with a base year of 2005. The following exercises will help you to understand the different 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 Indicate which economy satisfies each of the following…
A mathematical approximation called t he rule of 70 tells us that the number of years that it will take something that is growing to double in size is approximately equal to the number 70 divided by its percentage rate of growth. Thus, if Mexico’s real GDP per person is growing at 7 percent per year, it will take about 10 years (= 70 / 7) to double. Apply the rule of 70 to solve the following problem. Real GDP per person in Mexico in 2005 was about $11,000 per person, while it was about $44,000 per person in the United States. If real GDP per person in Mexico grows at the rate of 5 percent per year, about how long will it take Mexico’s real GDP per person to reach the level that the United States was at in 2005? (Hint: How many times would Mexico’s 2005 real GDP per person have to double to reach the United States’ 2005 real GDP per person?)
Real GDP per capita in the country of Arcadia grew from about $4.545 in 1900 to about $40.064 in 2008, which represents an annual growth rate of 2.04 percent IH Arcadia continues to grow at this rate, calculate the number of years when its real GDP per capita will double years. (Enter your response as an integer)
Small differences in growth rates in the size of the economy, over several decades, will result in big differences in the size of the economy. Pretend we start in 1950 and the U.S. growth in real GDP has been around 3.15%. This has resulted in real GDP growing 8 times over this 70-year period (1950 to 2020). If real GDP growth had been 4.0%, real GDP would be times larger. a. 8 (about the same growth as with 3.15% growth) b. 10 С. 14 d. 16