(Scenario: Technological Progress and Productivity Growth in Techland) Scenario:
ID: 1103794 • Letter: #
Question
(Scenario: Technological Progress and Productivity Growth in Techland)Scenario: Technological Progress and Productivity Growth in Techland
In Techland, from 1980 to 2010, holding technology and human capital fixed, increasing physical capital per worker from $25,000 to $100,000 would have led to a doubling of real GDP per worker, from $40,000 to $80,000. However, not only did physical capital per worker increase from $25,000 to $100,000, but technological progress shifted the productivity curve upward so that real GDP per worker actually increased from $40,000 to $320,000.
Look at the scenario Technological Progress and Productivity Growth in Techland. What was the growth rate of real GDP per capita in Techland? (Scenario: Technological Progress and Productivity Growth in Techland)
Scenario: Technological Progress and Productivity Growth in Techland
In Techland, from 1980 to 2010, holding technology and human capital fixed, increasing physical capital per worker from $25,000 to $100,000 would have led to a doubling of real GDP per worker, from $40,000 to $80,000. However, not only did physical capital per worker increase from $25,000 to $100,000, but technological progress shifted the productivity curve upward so that real GDP per worker actually increased from $40,000 to $320,000.
Look at the scenario Technological Progress and Productivity Growth in Techland. What was the growth rate of real GDP per capita in Techland?
Explanation / Answer
The real GDP per capita grew 7.18%
Future Value = Present Value*((1+r)^t) where r is the interest rate and t is the time period Real GDP per worker increased from 40000 to 320000 in 30 years 320000 = 40000*(1+r)^30 (1+r)^30 = 8 1+r = 8^1/30 1+r = 1.0718 r = .0718Related Questions
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