100%(5)5 out of 5 people found this document helpful
This preview shows page 4 - 6 out of 6 pages.
D)The federal government adjusts transfer payments to reflect the cost of living. Which ofthe measures should the government use to index transfer payments? Why?E)If the federal government was paying the average Social Security recipient in Canadia$500/month in 2010, how much would the government have to pay Social Securityrecipients in 2012 so that they can afford the same lifestyle as in 2010?7.The table below lists the real GDP/capita (in 2005$) for Australia, Cameroon, and Mexico from1960-2000. Use this information to calculate the following:AustraliaCameroonMexico1960$12,003$1,900$4,4211970$16,646$1,874$6,1691980$20,014$2,798$9,2631990$23,130$2,710$8,5512000$30,124$2,446$10,360A)Calculate the growth rates in real GDP/capita from 1960-1970, 1970-1980, 1980-1990, and1990-2000 for each country.B)For each country and decade, use the rule of 70 to figure out how long it would take for realGDP/capita to double at that growth rate.AustraliaGrowth RateTime to double1960$12,0031970$16,64637.17%1.88 decades1980$20,01420.23%3.46 decades1990$23,13015.57%4.5 decades2000$30,12430.24%2.31 decadesCameroonGrowth RateTime to double1960$1,9001970$1,874-1.37%51.15 decades to halve1980$2,79849.3%1.42 decades1990$2,710-3.15%22.26 decades to halve2000$2,446-9.74%7.29 decades to halve
MexicoGrowth RateTime to double1960$4,4211970$6,16939.54%1.77 decades1980$9,26350.15%1.4 decades1990$8,551-7.69%9.11 decades to halve2000$10,36021.16%3.31 decadesC)Assume the growth rates between 1990 and 2000 were to persist into the future. In what yearwould real GDP/capita be twice the level it was in 2000 for each country?8.Draw an Aggregate Production Function for the US. And indicate the current state of the economyat point A. Use the model to explain what would happen to real GDP/capital as a result of each ofthe following situations:a.The US makes college/trade school tuition free for everyone