PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 2P
To determine
Describe the possibility of average living standard to rise during labor productivity falls.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The "graying of America" will substantially increase the fraction of the population that is retired in the decades to come. To illustrate
the implications for U.S. living standards, suppose that over the 56 years following 2016 the share of the population that is working
returns to its 1960 level, while average labor productivity increases at the same rate as it did during 1960-2016. Under this scenario,
what would be the net change in real GDP per person between 2016 and 2072?
Average labor productivity
47,263
110,384
Instructions: Enter your response as whole numbers for dollar values and rounded to one decimal place for percentages.
Real GDP per person in 2016: $
Real GDP per person in 2072: $
Net change in real GDP per person between 2016 and 2072: $
Year
1960
2016
Share of population employed
36.4%
46.8%
which is an increase of
% from 2016.
The “graying of America” will substantially increase the fraction of the population that is retired in the decades to come. To illustrate the implications for U.S. living standards, suppose that over the 56 years following 2016 the share of the population that is working returns to its 1960 level, while average labor productivity increases at the same rate as it did during 1960–2016. Under this scenario, what would be the net change in real GDP per person between 2016 and 2072?
Year
Average labor productivity
Share of population employed
1960
47,263
36.4%
2016
110,384
46.8%
Instructions: Enter your response as whole numbers for dollar values and rounded to one decimal place for percentages.Real GDP per person in 2016: $51,660
(need help) Real GDP per person in 2072: $
(need help) Net change in real GDP per person between 2016 and 2072: $____________ , which is an increase of___________ % from 2016.
The “graying of America” will substantially increase the fraction of the population that is retired in the decades to come. To illustrate the implications for U.S. living standards, suppose that over the 56 years following 2016 the share of the population that is working returns to its 1960 level, while average labor productivity increases at the same rate as it did during 1960–2016. Under this scenario, what would be the net change in real GDP per person between 2016 and 2072?
Year
Average labor productivity
Share of population employed
1960
47,263
36.4%
2016
110,384
46.8%
Instructions: Enter your response as whole numbers for dollar values and rounded to one decimal place for percentages.(need help)Real GDP per person in 2016: $
(need help) Real GDP per person in 2072: $
(need help) Net change in real GDP per person between 2016 and 2072: $____________ , which is an increase of___________ % from 2016.
Chapter 4 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
Knowledge Booster
Similar questions
- Many countries, including Pakistan, import substantial amounts of goods and services from other countries. However, economists claim that a country can enjoy a high standard of living only if it can produce a large quantity of goods and services itself. Can you reconcile these two facts? (Maximum 100 words). Given the production function Y= AF (L, K, H, N), explain the determinants of productivity. ( Maximum100 words). Population growth has a variety of effects on productivity. Explain this statement and justify your answer. (Maximum 200 words).arrow_forwardUsing the demand and supply of loanable funds, demonstrate the effect of the following on the interest rate. As a result, what would you expect to be the impact of the change on growth? (LO9-3) a-Government increases spending. b-Businesses become more productive. c-The people as a whole save more.arrow_forwardSuppose Nation B has 8,623 labor hours each year to produce burgers and fries. Burgers take 13 hours to produce each, and fries take 7 hours to produce each. Suppose Nation B also sees a sudden surge in working-age immigrants, leading to 26% higher labor hours each year. What is the maximum number of fries is Nation B able to produce in a year after this surge of immigration? Round your answer to one place after the decimal point (0.1).arrow_forward
- a) Prepare a table and line graph showing the unemployment and economic growth rate for a Caribbean country and a developed country (other than the US) for the last 5 years. Examine the relationship observed between the two countries. b) Identify THREE public policies that can stimulate employment and facilitate economic growth in an economy. Use examples to clearly illustrate how EACH policy can stimulate employment and facilitate economic growth in your country. (Max 750 words)arrow_forwardSay that the average worker in Canada has a productivity level of $30 per hour while the average worker in the United Kingdom has a productivity level 34. of $25 per hour (both measured in U.S. dollars). Over the next five years, say that worker productivity in Canada grows at 1% per year while worker productivity in the UK grows 3% per year. After five years, who will have the higher productivity level, and by how much?arrow_forwardSuppose the production function is Y = AK0.3N0.7. Suppose in 2010, K = 1000, N = 100, and Y = 199.5. In 2020, capital, labor, and output have doubled, so K = 2000, N = 200, and Y = 399. (a.) By what percentage did productivity grow from 2010 to 2020? (b.) If output had risen to 798 instead of 399, and capital and labor doubled, by what percentage would productivity have grown from 2010 to 2020?arrow_forward
- A2-3 Consider an economy in which the amount of investment is equal to the amount of saving (i.e., the economy is closed to international flows of capital). Any output that is not saved is consumed. The Production Function is y = Akº. Find the value of y, the fraction of income that is invested, that will maximize the Steady-State Level of Consumption per Worker? (This is called the "Golden Rule" Level of Investment.) css=yss - y. yss Hint: Remember in the Steady State: Ak = y.yt - (8+n)kt = 0arrow_forwardIn 2000, a small nation has real GDP of $20,000 and a population of 150. By 2010, real GDP has grown to $30,000, and improved nutrition has allowed the population to increase to 220. Which statement must be true for this nation? In another 10 years, there will not be enough capital equipment for workers to use. Per capita GDP is higher in 2010 than it was in 2000. The high rate of population growth has caused real GDP per capita to fall. The productivity of labor in this nation has remained constant. As the nation's leading expert in economics, you have been asked to present a series of economic policies you believe would be helpful to the nation. Because of budget constraints, the legislature also wants you to rank your suggestions. Which suggestion would be last on your list of policy proposals? research and development funding strict population control measures improvement of the educational system reduction of trade barriersarrow_forward1 ) On January 1, 2026 each of Boblandia's 100 workers has $1 in physical capital. Over the course of the year, its physical capital depreciates by 5%, and the number of workers increases by 5%. How much does Boblandia have to invest in 2026 to make sure that its capital to labour ratio is the same on January 1, 2027 as it was on January 1, 2026arrow_forward
- Assume that digital revolution popularizes the use of artificial intelligence (computers) in the workplace. The production function becomes: Y = 0.25 K(2/5)(ACN)(3/5) where C stands for the number of computers.: a) Use growth accounting to predict the increase in total output in response to an increase in the number of computers by 10 percent. b) The nominal interest rate on government bonds equals 9 percent and inflation equals percent. The rate of GDP growth is equal to the result obtained in (a). Use the debt dynamics equation and graph to explain whether or not the level of public debt in percent of GDP can be stabilized if the government runs a primary deficit. c) Use the neoclassical investment model (equation and graphs) to assess the impact of a decrease in the number of computers on investment (in traditional physical capital K).arrow_forwardSuppose the economy of Utopia has a labor force of 600 workers, 100 units of capital and 400 hectares of land. It produces manufactured goods (M) which use labor (LM) and capital (K) in production and agricultural goods (A) which use labor (LA) and land (T) in production. The production functions are given by: QM = VR/LM %3D And Ly + LA = L = 600 In autarky, PA = PM = 10. %3D Suppose Utopia engages in trade and the price of manufactured goods, PM = 20. What happens to: 1. The workforce and output of manufactured goods? Of agricultural goods? 2. The nominal and real wage in Utopia? 3. The real return to capital and to land in Utopia? 4. Will everyone support trade?arrow_forwardThe data of for 1960 shows that the real GDP per capita was $6,354 for Japan, $12,282 for Germany, and $13,780 for the United Kingdom. (2011 US$). Suppose Japan maintained a 3% annual growth rate of real GDP per capita, Germany a 2% annual growth rate and the United Kingdom a 1% annual growth rate. Then which of the three countries will have the highest real GDP per capita in 2040? (Click to select) The real GDP per capita in 2040 for Japan: The real GDP per capita in 2040 for Germany: [ The real GDP per capita in 2040 for the United Kingdom: (Give your answer rounded to the nearest whole number) :arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education