Name: Jeffrey ho lam choi
ID939973473
Homework 1 ECON 471 (each question worth 20 points)
1. Explain and show your calculations on which country would be better off in 50 years. Country A has a
current GDP per capita of $41,000 and a growth rate of 2% (as

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Carefully answer each of the questions below.
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Y

The Goods and Financial Markets
Equilibrium in the Goods Market
Equilibrium condition that Y = Z and
Y C (Y T ) I G
I b 0 b 1Y b 2 i
To determine equilibrium use
C c 0 c1 (Y T )
I b 0 b1Y b 2 i
Z c 0 b 0 b 2 i G c 1T
c 1 b 1 Y
Y
1
1 c1 b1
c 0
b 0 b 2