There are two countries in the world: Happytimes and Treehausland. Both countries currently have a GDP per capita of 1. Use the information in the table about growth and productivity to answer the questions. Round all numerical answers to two decimal places.CountryGrowth rate of GDP per capitaHappytimes0.086Treehausland0.031What is GDP per capita in Happytimes in 21 years21 years ?Happytimes's GDP: $ What is GDP per capita in Treehausland in 21 years21 years ?Treehausland's GDP: $ In 21 years21 years , Happytimes grows how many times more than Treehausland?Happytimes's growth: times Treehausland's growth

GDP refers to the sum total of the market value of final goods and services produced in a country during a particular year. GDP includes on newly produced goods and services. Used and second hand goods are not included in GDP to avoid the problem of double counting. GDP per capita is obtained by dividing country's GDP with the total population. GDP per capita in n years = Current GDP per capita (1 + growth rate of GDP per capita) ^ n Happytimes Current GDP Per Capita = 1 Growth Rate of GDP Per Capita = 0.086 GDP Per Capita in 21 Years = 1 * (1 + 0.086) ^ 21 = 1 * (1.086) ^ 21 = 1 * 5.654 = 5.654 GDP Per Capita in 21 Years = 5.65Treehausland Current GDP Per Capita = 1 Growth Rate of GDP Per Capita = 0.031 GDP Per Capita in 21 Years = 1 * (1 + 0.031) ^ 21 = 1 * (1.031) ^ 21 = 1 * 1.898 = 1.898 GDP Per Capita in 21 Years = 1.90The GDP per capita of Happytimes in 21 years will be 5.65.The GDP per capita of Treehausland in 21 years will be 1.90.So, in 21 years, Happytimes grow by 2.97 (5.65/1.90) times more than Treehausland. So, we can say that in 21 years, economy of Happytimes will become approximately 3 times the economy of Treehausland.

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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There are two countries in the world: Happytimes and Treehausland. Both countries currently have a GDP per capita of 1. Use the information in the table about growth and productivity to answer the questions. Round all numerical answers to two decimal places.

Country	Growth rate of GDP per capita
Happytimes	0.086
Treehausland	0.031

What is GDP per capita in Happytimes in 21 years21 years ?

Happytimes's GDP: $

What is GDP per capita in Treehausland in 21 years21 years ?

Treehausland's GDP: $

In 21 years21 years , Happytimes grows how many times more than Treehausland?

Happytimes's growth:

times Treehausland's growth

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