Today two economies have the same size (e.g., $1B). The growth rate for the first one is 3% and for the second, 6%. How many times the second economy will be larger than the first in 100 years? 17.65, 2, 10.32, 6.89
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- An economy has an ICOR of 4.5. What would be its average annual growth rate if its Domestic Savings ratio is 20% and Net Imports ratio is 7%?Suppose that the investment demand curve in a certain economy is such that investment declines by $130 billion for every 1 percentage point increase in the real interest rate. Also, suppose that the investment demand curve shifts rightward by $150 billion at each real interest rate for every 1 percentage point increase in the expected rate of return from investment. If stimulus spending (an expansionary fiscal policy) by government increases the real interest rate by 2 percentage points, but also raises the expected rate of return on investment by 1 percentage point, how much investment, if any, will be crowded out? Instructions: Enter your answer as a whole number. 2$ billionFor each growth rate below, (i) use the rule of 70 to calculate how long it will take incomes to double, and (ii) if each country starts with an income of $1,000 per capita, use the exponential growth equation to calculate what the income will be in 30 years. Instructions: Round your answers to one decimal place. Years for incomes to Incomes in double 30 years a. 4 percent b. 7 percent c. 2.5 percent d 10 percent e. 3 percent
- a. In 2000, the population of a country was approximately 5.76 million and by 2050 it is projected to grow to 10 million. Use the exponential growth model A=A0ekt, in which t is the number of years after 2000 and A0 is in millions, to find an exponential growth function that models the data. b. By which year will the population be 11 million?How much would $1 growing at 5% per year be worth after 100 years? What wouldthe FV be if the growth rate were 10%? ($131.50, $13,780.61)Most economies have a goal of maximizing the average consumption per period. Assume that during each year, an economy saves the same (to be determined) percentage S of its production. During a year in which the beginning capital level is K, a quantity K1y2 of capital is produced. If the economy saves a percentage S of its capital, then during the current year it consumes (1 2 S)K units of capital and, through savings, adds (SK) 1y2 units of capital. Also, during any year, 10% of all capital present at the beginning of the year depreciates or wears out. a. What annual savings percentage S maximizes the long-run average consumption level? Assume that year 50 represents the long run, so that the objective is the consumption level in year 50. You can assume the initial capital is 1 (for some appropriate measurement unit). b. Use SolverTable to see how the optimal value of S depends on the annual depreciation rate.
- Time Value of Money Suppose California’s population is 36.5 million people and its population is expected to grow by 2% annually. How long will it take for the population to double?World Bank data on a developing country shows per capita incomes of $4,500 for urban residents and $3,200 for rural residents. Migration from rural to urban areas has slowed the growth of urban incomes to a 3.0% average annual rate while rural per capita incomes grew 4.5% annually. If the historic growth rates continue into the future, how many years will it take for incomes to equalize? Number of Years:Suppose the average growth rate for a small town with a population of 35,180 in the northeast United States was approximately 0.65% per year. (a) Assuming that growth rate continues, write an equation that will give the population A in t years. A= ? (b) In how many years will the population be 40,000? Round to the nearest tenth of a year. ? yr
- If the velocity of circulation is constant, real GDP is growing at 3 percent a year, the real interest rate is 2 percent a year, and the nominal interest rate is 7 percent a year, calculate the inflation rate, the growth rate of money, and the growth rate of nominal GDP.c. We sometimes need to find how long it will take a sum of money (or anything else) to grow to some specified amount. For example, if a company's sales are growing at a rate of 20 percent per year, how long will it take sales to double?Suppose in the year 2004 you invested $ 1000.- at an interest rate ? which is such that your capital doubles every 6 years (interest is compounded annually). That interest rate is percent. During the period 2004-2010 your money will grow by a factor . = During the period 2005-2011 your money will grow by a factor = . During the period 2007-2019 your money will grow by a factor . = During the period 2017-2035 your money will grow by a factor . = During the period 2010-2025 your money will grow by a factor . = When you retire in 50 years your investment will have grown to $ =