Macro tut 6 Class Problems

Macro tut 6 Class Problems - Business Macroeconomics,...

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Business Macroeconomics, Tutorial 6 MP: Macroeconomics, 9 th ed. Chapter 6 , CFO: POM, 9 th edition Chapter 7 . Tutorial 6: Economic Growth Class Problems and Applications 1 . Japan’s real GDP was 561 trillion yen in 2007 and 569 trillion yen in 2008. Japan’s population was 127.7 million in 2007 and 127.8 million in 2008. Calculate a. The economic growth rate. b. The growth rate of real GDP per person. c. The approximate number of years it takes for real GDP per person in Japan to double if the 2008 economic growth rate and population growth rate are maintained. 2. Tables 1,2, and 3 present some data on three hypothetical economies. Complete the tables by figuring the measured productivity of labour and the rate of output growth. What do the data tell you the causes of economic growth?( Hint : Hoe fast are L and K growing?) Table 1 : Period L K Y Y/L Growth Rate of output 1 1,052 3,065 4,506 2 1,105 3,095 4,674 3 1,160 3,126 4,842 4 1,218 3,157 5,019 Table 2 : Period L K Y Y/L Growth Rate of output 1 1,052 3,065 4,506 2 1,062 3,371 4,683 3 1,073 3,709 4,866 4 1,084 4,079 5,055 Table 3 : Period L K Y Y/L Growth Rate of output 1 1,052 3,065 4,506 2 1,062 3,095 4,731 3 1,072 3,126 4,957 4 1,084 3,157 5,216 3. In the economy of Cape Despair, the subsistence real wage rate is $15 an hour. Whenever real GDP per hour rises above $15, the population grows, and whenever real GDP per hour of labor falls below this level, the population falls. The table shows Cape Despair’s production function. Initially, the population of Cape Despair is constant and real GDP per hour of labor is at the subsistence level of $15. Then a technological advance shifts the production function upward by 50 percent at each level of labor. a.
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This note was uploaded on 06/07/2011 for the course ECON 3 taught by Professor Dd during the Spring '11 term at Alvin CC.

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Macro tut 6 Class Problems - Business Macroeconomics,...

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