ECON 214 Problem Set 4 solutions complete answers

ECON 214 Problem Set 4 solutions complete answers 

Just put your values given and automatically provide answers for you!

Question 1

 

Real per capita GDP in South Korea in 1958 was about $400, but it doubled to about $800.00 by 1981.

 

a. What was the average annual economic growth rate in South Korea over the 23.00 years from 1958 to 1981? (NOTE: Round this to two places past the decimal point.) 

 

b. Per capita real GDP doubled in South Korea again in only seven years, reaching $1600.00 by 1988.00. What was the average annual economic growth rate between 1981 and 1988.00? (NOTE: Round this to two places past the decimal point.)

 

Question 2

 

Please read the article below, and use the information in the article to answer this question.

 

Asia's Rise Keeps Pulling Americans West by Noah Smith

 

The article discusses how it is good to be near a trading partner—especially a rich trading partner—for two reasons: a) it is cheaper to trade with a close trading partner than one that is far away and b) a rich trading partner offers more opportunities for trade than a poor one. As the article points out, Germany benefits as the neighboring country, France, becomes wealthier.

 

Consistent with this argument, the states on the West Coast of the United States have seen rapid economic growth as        has experienced rapid economic growth.   

 

In contrast, states along the East Coast should see slow economic growth and possibly even a decline as the economy of        stagnates.

 

Question 3

 

Assume that the argument made in the article is correct. Given this argument, consider the following hypothetical cases. First, suppose that Mexico experiences rapid economic growth for a long time. Move the states that should grow quickly to the box “Grow quickly.” Move the other states to the other box.

 

Next, consider a different scenario. Instead of Mexico experiencing rapid economic growth, suppose that Canada experiences rapid and prolonged economic growth. Consider the effect of Canada’s economic growth on the economic growth of various U.S. states. Move the states that should grow quickly (because of Canada’s rapid economic growth) to the box “Grow quickly.” Move the other states to the other box.

 

Question 4

 

The rule of 70 applies in any growth-rate application. Let’s say you have $1000.00 in savings and you have three alternatives for investing these funds. How many years would it take to double your savings in each of the following three accounts? In all cases, give your answers to two decimals.

 

a. a savings account earning 0.75% interest

 

b. a U.S. Treasury bond earning 2.50% interest

 

c. a stock market mutual fund earning 7.00% interest

 

Question 5

 

Suppose that nominal GDP was $9500000.00 in 2005 in Fairfax County Virginia. In 2015, nominal GDP was $11500000.00 in Fairfax County Virginia. The price level rose 1.50% between 2005 and 2015, and population growth was 3.75%. Calculate the following figures for Fairfax County Virginia between 2005 and 2015. Give all answers to two decimals.

 

a. Nominal GDP growth was

 

b. Economic growth was

 

c. Inflation was

 

d. Real GDP growth was

 

e. Per capita GDP growth was

 

f. Real per capita GDP growth was

 

Question 6

 

What would Israel’s nominal GDP growth rate be if Israel experienced a real GDP growth rate next year the same as its average over the period 1950-2010, with an inflation rate of 3% and population growth of 0%? Give your answer to two decimal places.

 

Question 7

 

How much does real GDP per capita need to increase in South Korea in 2011 to achieve a growth rate consistent with its 60-year average (1950-2010)?  Round your answer to the nearest dollar.

 

Question 8

 

Nominal GDP in Venezuela has grown rapidly in recent years. But historically, Venezuela is a country that has struggled with inflation rates. The table below gives statistics for Venezuela in a recent year.

 

What was the rate of economic growth for Venezuela?       % (Round your answer to the nearest tenth.)

 

If Venezuela continues to grow at its current rate of economic growth, how long will it take to double the level of per capita real GDP? Round your answer to the nearest tenth.

 

Question 9

 

For each of the following policies, select the type of resource that is the primary focus of the policy.

 

a. aid from the IMF (International Monetary Fund) for the education of technology workers 

 

b. a piece of legislation banning drilling for oil in Alaska

 

c. laws mandating school attendance for children younger than 18

 

d. state tax credits for the construction of new company headquarters within the state 

 

Question 10

 

Technology is

 

Which of the following is not an example of a technological advancement?

 

Technological innovations are often clustered in particular locations because of

 

Question 11

 

An institution is a significant practice, relationship, or organization in a society. Institutions shape the environment in which decisions are made, and they affect production and income in a nation. The most significant institutions are private property rights, political stability and the rule of law, open and competitive markets, efficient taxes, and stable money and stable prices. Complete each of the following sentences with the correct institution.

 

a. The single greatest incentive for voluntary production is the existence of

 

b.        increase investment in physical and human capital because they increase the predictability of future payoffs.

 

c. Specialization is more likely to occur in nations with        and result in more efficient production because of economies of scale.

 

d. The Xiaogang agreement that led to an agricultural boom in China is an example of the power of       .

 

Question 12

 

Comparing the 40 poorest nations with the high-income OECD nations, are the following living conditions higher or lower in poorer nations?

 

Question 13

 

Between 2015 and 2016, the country of West Fredonia experienced a growth rate of -2.6%. If nominal GDP had increased by 2.1% and the population growth was recorded as 0.4%, then calculate the annual inflation rate in West Fredonia.  Give your answer to one decimal.

 

Question 14

 

Using the information in the table above, calculate economic growth for 2015.  Give your answer to two decimal places.

 

Question 15

 

Assume real per capita GDP in North Metropolania is $10,000 while in East Quippanova it is $2,500. The annual growth rate in North Metropolania is 2.33%, while in East Quippanova it is 7%. How many years will it take for East Quippanova to catch up to the real per capita GDP of North Metropolania?

 

What will the income of the two countries be when it is equal?