Macroeconomics
21st Edition
ISBN: 9781259915673
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 6, Problem 3DQ
To determine
Economic growth .
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Check out a sample textbook solutionStudents have asked these similar questions
Between 1970 and 2005, Chinaâs GDP per capita grew at an average rate of 7.3% per year while GDP per capita in the US grew at an average rate of 2.2%. In 2005, US GDP per capita was $36,806 and Chinese GDP per capita was $5,955. Assuming that the two countries continue to grow at these rates, in what year will China overtake the US in terms of GDP per capita?
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The accompanying table shows real GDP from 2010 to 2015 for China, measured in billions of 2009 dollars:
Bil1ions of 2009
Year
Dollars
Growth Rate
2010
5,609
2011
6,140
2012
6,613
2013
7,122
2014
7, 642
2015
8, 169
J
Instructions: Enter your response rounded to one decimal place.
a) Complete the growth rate column above.
%
b) By what percentage did the Chinese economy grow between 2010 and 2015?
c) Chinese economic growth was the highest in (Click to select)
The following figure shows that the average growth rate of real per capita GDP is negatively related to
the initial level of real per-capita GDP.
Average real per capita growth (5)
4.50
4.00
3.50
3.00
2.50
||US
-2.11
1.50
1.00
0.50
0.00
PHI
O
Dein
HA
02.000 6,000 10,000 14,000
Real income per capita, 1950
Per capita growth 1950-2007 for 22 OECD countries
What can we conclude from the above Figure?
Because of the diminishing returns to capital accumulation, we should see tendencies for unconditional
convergence between poor and rich countries.
Divergence between countries is expected if we make conditions on key variables such as population growth
rates and savings rates.
If countries have similar features such as population growth rates and saving rates, then conditional
convergence may occur
The OECD countries are homogeneous Richer is the country, faster is its growth rate
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Similar questions
- An economy starts off with a GDP per capital of 12,000 euros. How large will the GDP per capita be if it grows at an annual rate of 3 for 10 years? 3 for 30 years? 6 for 30 years?arrow_forwardAn economy starts off with a GDP per capita of 5,000. How large will the GDP per capita be if it grows at an annual rate of 2 for 20 years? 2 for 40 years? 4 for 40 years? 6 for 40 years?arrow_forwardWhat are the advantages of backwardness for economic growth?arrow_forward
- What is the difference between extensive and intensive growth? Why was the Soviet Union successful in terms of extensive growth under Stalin, but failed to succeed in terms of intensive growth during the reform periods under Khrushchev and Gorbachev?arrow_forwardFor a high-income economy like Australia, what aggregate production functionelements are most important in bringing about growth in GDP per capita? What about a middle-income country such as India? A low-income country such as Afghanistan?arrow_forwardSuppose that work hours in New Zombie are 300 in year 1 and productivity is $14 per hour worked. What is New Zombie's real GDP? $ If work hours increase to 320 in year 2 and productivity rises to $16 per hour, what is New Zombie's rate of economic growth? Instructions: Round your answer to two decimal places. Rate of growth= %arrow_forward
- Which impacts economic growth? O a decrease in the productivity of labor O an increase in the proportion of the population that is college educated O an increase in the average wage rate paid to workers O an increase in the standard of livingarrow_forwardSuppose that work hours in New Zombie are 200 in year 1 and productivity is $8 per hour worked. What is New Zombie’s real GDP? If work hours increase to 210 in year 2 and productivity rises to $10 per hour, what is New Zombie’s rate of economic growth? Explain why sustained long-term economic growth comes from increases in labor productivity. Why do you think the trend rate of U.S. productivity growth has increased since the earlier 1973–1995 period?arrow_forwardSuppose that work hours in New Zombie are 200 in year 1 and productivity is $8 per hour worked. What is New Zombie’s real GDP? If work hours increase to 210 in year 2 and productivity rises to $10 per hour, what is New Zombie’s rate of economic growth? Explain why sustained long-term economic growth comes from increases in labor productivity. Why do you think the trend rate of U.S. productivity growth has increased since the earlier 1973–1995 period? The quantity of labor and increases in labor productivity are important sources of economic growth. Between 1953 and 2015, in the US economy the labor force increased from 63 million to 158 million workers. Productivity growth has usually been the more significant factor. To calculate real GDP in a given year you have to multiply hours worked by productivity. Suppose that New Zombie has adopted the framework used by the US Bureau of Labor Statistics to calculate its labor force statistics. Following information is extracted from a…arrow_forward
- . For a high-income economy like the United States, what aggregate production function elements are most important in bringing about growth in GDP per capita? What about a middle-income country such as Brazil? A low-income country such as Niger?arrow_forwardThe hockey stick of growth shows us O That environmental damage has increased dramatically in the past century That GDP per capita has increased dramatically in the past century O That wealth per capita has increased dramatically in the past century O That inflation per capita has increased dramatically in the past centuryarrow_forwardSuppose China’s GDP is growing by 7% a year and its population grows by 1% a year. Also suppose that US GDP grows by 3% a year and its population grows by 1% a year, and that in 2019 US GDP is 1.5 times China’s while US population is one quarter of China’s. If these growth rates continue By what year will China’s GDP double? Its population? Its per capita GDP?In what year will China’s GDP equal US GDP?In what year will China’s GDP per capita equal US GDP per capita?arrow_forward
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