EBK ECON MICRO
6th Edition
ISBN: 9781337671828
Author: MCEACHERN
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Question
Chapter 21, Problem 1P
To determine
The expected years that the per capita income of the Democratic Republic of Congo will take to surpass the per capita income of the United States of America.
Concept Introduction:
The per capita income index is an indicator of how much an individual earns in comparison to his peers in an economy during a specific period of time. This indicator helps to understand the standard of living of individuals in different countries by comparing their average per capita income with one another.
Expert Solution & Answer
Explanation of Solution
Currently the per capita income of United States is 160 times greater than the per capita income of Congo. The per capita income growth of United States is 3% per annum in comparison to 6% per annum per capita growth of Congo. Thus, we can understand that Congo's per capita income growth is 3% faster per annum than the United States.
To calculate the number of years that Congo requires for surpassing the per capita growth of United States:
Where,
g = growth rate
t =number of years required
n = per capita income
Hence, in 171.70 years, the Democratic Republic of Congo’s per capita income will surpass the per capita income of the United States of America, if both the countries continue to grow at the current growth rate annually.
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Suppose instead that China's real GDP growth turns out to be 6.9 percent per
year for the next decade.
By how much will China's real GDP increase then during the entire decade?
China's real GDP will increase by Type percent during the entire decade.
(Round your response to one decimal place.)
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4. You have been hired to forecast future population level for a small country. You know that this country
currently has 15 million citizens and wishes to achieve a population level twice the current population, 50 years
from now.
(a) What population growth rate must it maintain in order to achieve this goal?
(b) What if this country chooses a goal of 36 million people? What population growth rate would that require?
16)A mathematical approximation called the rule of 70 tells us that the number of years that it will take something that is growing to double in size is approximately equal to the number 70 divided by its percentage rate of growth. Thus, if Mexico’s real GDP per person is growing at 7 percent per year, it will take about 10 years (= 70/7) to double. Apply the rule of 70 to solve the following problem. Real GDP per person in Mexico in 2005 was about $11,000 per person, while it was about $44,000 per person in the United States.
If real GDP per person in Mexico grows at the rate of 4 percent per year, about how long will it take Mexico’s real GDP per person to reach the level that the United States was at in 2005? (Hint: How many times would Mexico’s 2005 real GDP per person have to double to reach the United States’ 2005 real GDP per person?)
Instructions: Enter your answer as a whole number.
Chapter 21 Solutions
EBK ECON MICRO
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