hw solution - 06E:002:SCA Principles of Macroeconomics...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
06E:002:SCA Principles of Macroeconomics Homework 4 Due 25 March, 6:00 pm 1. (a) We know that Y/Pop = Average Labor Productivity x Share of the population employed. Then since the employment share is constant, for two consecutive years, t+1 and t we have: Real GDP per person grows at the same rate as average labor productivity, that is 6%. (b) Nominal GDP growth rate would be 6% + 10% = 16% (c) We know that real GDP per capita grows at 6%, so we can compute it in the following table: Year GDP per person 1987 6000.00 1988 6360.00 1989 6741.60 1990 7146.10 1991 7574.86 1992 8029.35 1993 8511.11 1994 9021.78 1995 9563.09 1996 10136.87 1997 10745.09 1998 11389.79 1999 12073.18 2000 12797.57 2001 13565.42 2002 14379.35 2003 15242.11 2004 16156.64 2005 17126.03 2006 18153.60 2007 19242.81 (d) GDP per person doubles in between 11 and 12 years, which is consistent with the rule of 70 which implies that it would double in 70/6 = 11.67 years. (e) Average Labor productivity = (Y/Pop)/Employment share, therefore:
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/26/2008 for the course ECON 06e taught by Professor Popov during the Spring '08 term at University of Iowa.

Page1 / 3

hw solution - 06E:002:SCA Principles of Macroeconomics...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online