1 Growth Experiences Small Differences In The Rate Of Economic Growth Can Lead To Large Differences In Living Standards 1 (33.11 KiB) Viewed 47 times
1 Growth Experiences Small Differences In The Rate Of Economic Growth Can Lead To Large Differences In Living Standards 2 (11.24 KiB) Viewed 47 times
1. Growth experiences Small differences in the rate of economic growth can lead to large differences in living standards. Consider two countries: Outer Perturbia and Gadzhooks. Currently, real GDP per person (average income) is $50,000 in Outer Perturbia and $16,667 in Gadzhooks. Suppose you want to project what the real GDP per person will be in each country 100 years from now. The following formula shows how to compute the average income in n years, where g represents the growth rate of real GDP per person (in decimal form-that is, 1.5% is entered as 0.015): Average Income in n Years Current Average Income x (1+9)" Use the growth formula to find the correct amounts to select to fill in the following table Average Income after 100 Years Growth Rate: (Percent) (Dollars) Outer Perturbia Gadzhooks 1.5 1.7 4 42 Suppose Outer Perturbia's growth rate is expected to grow at 1.5% and remain there for the next 100 years. Which of the following growth rates in Gadzhooks would cause the average income in Gadzhooks to exceed the average income in Outer Perturbia in 100 years? Check all that apply
Suppose Outer Perturbia's growth rate is expected to grow at 1.5% and remain there for the next 100 years. Which of the following growth rates in Gadzhooks would cause the average income in Gadzhooks to exceed the average income in Outer Perturbia in 100 years? Check all that apply. 1.5% 01.7% 4.0% 4.2 %
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