Macroeconomics: Principles and Policy (MindTap Course List)
13th Edition
ISBN: 9781305280601
Author: William J. Baumol, Alan S. Blinder
Publisher: Cengage Learning
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Question
Chapter 7, Problem 1TY
To determine
To analyze:The percentage growth in labor productivity.
Expert Solution & Answer
Explanation of Solution
Percentage change in labor productivity can be calculated by dividing the change in productivity by the old output.
For country A, it is
Similarly, it can be calculated for other countries:
| Output per Hour | Percentage Change In productivity | ||
| 2004 | 2014 | ||
| Country A | 40 | 48 | 20 |
| Country B | 25 | 35 | 40 |
| Country C | 2 | 3 | 50 |
| Country D | 0.5 | 0.6 | 20 |
Country D had lowest productivity in year 2004, which was 0.5 units/hr. But the percentage growth of labor productivity is highest in country C, which is 50%. Hence, it is not true that productivity growth was highest where the initial level of productivity was the lowest.
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Calculate real growth per capita in the following countries:
Instructions: Enter your responses rounded to one decimal place. If you are entering a negative number, be sure to include a negative
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a. Democratic Republic of Congo: population growth=2.6 percent; real output growth = -1.4 percent.
Real growth per capita:%
b. Estonia: population growth=-0.3 percent; real output growth 4.3 percent.
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c. India: population growth = 2.1 percent; real output growth 6.2 percent.
Real growth per capita: %
d. United States: population growth = 0.4 percent; real output growth 2.6 percent.
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%
Hypothetical data is given for the following countries. Calculate real growth per capita in the following countries:
Instructions: Enter your responses rounded to one decimal place. If you are entering a negative number, be sure to include a negative
sign (-) in front of the number.
a. Democratic Republic of Congo: population growth = 2.8 percent; real output growth=-1.6 percent.
Real growth per capita: %
b. Estonia: population growth-(0.6) percent; real output growth-4.5 percent.
Real growth per capita:[ %
c. India: population growth=1.7 percent; real output growth = 5.9 percent.
Real growth per capita: [ %
d. United States: population growth 0.7 percent; real output growth = 2.8 percent.
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Calculate the growth rate in the number of hours worked per capita, total output, and output per capita from the following information: What happens to the growth rates of total output and per capita output if the growth rate of productivity rises to 3.3 percent? What happens to the growth rates of total output and per capita output if the growth rate of the population rises to 2.0 percent?
Chapter 7 Solutions
Macroeconomics: Principles and Policy (MindTap Course List)
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