2. Divide the world\'s countries into two groups. The following table gives data
ID: 1106530 • Letter: 2
Question
2. Divide the world's countries into two groups. The following table gives data on their popula- tions and GDP per capita. It also shows the growth rates of population and GDP. The growth rates of population and GDP per capita in each country never change. Growth Rate of Population (% pa) 0 1.5 Growth Rate of GDP per capita (% pa) 1.5 0 Population in2000 GDP per Capita in 2000 1,000 1,000 Group A 1,000,000 B 1,000,000 a. What will the growth rate of world population be in the year 2000? Following 2000, will the growth rate of world population rise or fall? Explain why. Draw a graph showing the growth rate of world population starting in 2000 and continuing into the future. Toward what growth rate does world population move in the long run? 10 marks] b. Draw a similar graph showing the growth rate of total world GDP. [5 marks] c. Draw a similar graph showing the growth rate of average GDP per capita in the world.Explanation / Answer
As world is divided into two parts A & B
Will find average of gowth rates for both parts.
While dealing with rates we use geometric mean to get average therefore
Growth Rate of World population =1 -[(1+0%)*(1+1.5%)]^0.5 = 0.747%
Population growth of world will certainly rise as for A part it is zero & other part shows positive trend hence all in average world would show a positive trend in growth rate.
GDP per Capita for Country A = GDP per Capita for Country B =1000 and Population for A & B =1000000
GDP for the world is = (1000000*1000)*2 =20,000,000,000
We know average grwoth rate is 0.75% hence assuming this rate will remain the same for long horizon,
As this rate will not change over the period we will have flat growth rate of total gdp over a time period.
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