2000, a small country has real GDP of $20,000 and a population of 150. By 2010,
ID: 1106118 • Letter: 2
Question
2000, a small country has real GDP of $20,000 and a population of 150. By 2010, real GDP has grown to 30,000, while improved nutrition has allowed the population to increase to 220. Which of the following must be true for this nation? o In another 10 years, there will not be enough capital equipment for workers to use. The standard of living is higher in 2010 than it was in 2000 The productivity of labor in this nation has remained constant. o The high rate of population growth has caused the standard of living to fall. As the nation's leading expert in economics, you have been asked to present a series of economic policies you believe would be helpful to the nation. Because of budget constraints, the legislature also wants you to rank your suggestions. Which of the following would be LAST on your list of policy proposals? Strict population control measures Improvement of the educational system Reduction of trade barriers Research and development funding ° OExplanation / Answer
Per capita GDP = GDP /Population
pcI in 2000 = 20,000/150 = 133.33
PCI in 2010 = 30000/220 = 136.36
Per capita income has marginally improved.
b is true. Standard of living is better in 2010 than in 2000.
a. Strict population control will be my last option.
Improvement of educational system is the first and foremost choice. If we can educate people and convert them into human capital, everything else will be automatically taken care of.
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