Problem 9 Hu Tells Leaders China Growth Will Help World Economy Chinese President Hu Jintao told world leaders that his country "has taken an active part in the international cooperation to deal with the financial crisis" by providing a "$586 billion economic stimulus, focused on building low-rent housing, roads, railways and airports. The package also allows tax deductions for fixed assets such as machinery to stimulate investment. Farmers will also benefit from more subsidies." Hu stated that "China is in itself an important contribution to international financial stability and world economic growth." www.bloomberg.com 11/15/2008 If the fiscal stimulus spending does generate economic growth, what can we expect to see Problem 10 According to UNESCO reporting, "Governments in North America and Western Europe invested the highest shares of national resources in education: 5.6 percent of GDP." As a result, we would expect , all else held constant. www.worldometers.info

Calculate the following using the Rule of 70:  3) How many years will Vietnam grow with a GDP of $260 billion dollars at a growth rate of 7%?  4) How many years will India grow with a GDP of $3 trillion dollars at a growth rate of 3%?  5) How many years will the U.S. grow with a GDP of $19 trillion dollars at a growth rate of 1.9%?

Suppose country X currently produces $1000 of goods and services per year with a constant growth rate of 2.0% per year. Country Y's production is currently $800 with growth of 3.0% per year. Using the rule of 72, how long does it take for country X's production to double? Using the rule of 72, how long does it take for country Y's production to double? years After how long will the two countries have the same level of production? Estimate the level of production when the two countries produce the same amount. $ 36 years 24 years

Productivity and growth policies Consider a hypothetical small island nation in which the only industry is cloud computing. The following table displays information about the economy over a two year period. Complete the table by calculating physical capital per worker as well as labor productivity. Hint: Recall that productivity is defined as the amount of goods and services a worker can produce per hour. In this problem, measure productivity as the quantity of goods per hour of labor. Year 2039 2040 Physical Capital (Servers) 200 480 Labor Force (Workers) Based on your calculations, productivity from 2039 to 2040. 100 120 Physical Capital per Worker (Servers) Labor Hours (Hours) 4,500 4,200 in physical capital per worker from 2039 to 2040 is asociated with Suppose you're in charge of establishing economic policy for this small island country. Output (TB of data storage) 40,500 75,600 Imposing restrictions on foreign ownership of domestic capital Subsidizing research and development…