A. Calculate (approximately) how many years it will take for real GDP to double

Question

A. Calculate (approximately) how many years it will take for real GDP to double in each of the following cases.

i. The growth rate of China is 8%

ii. The growth rate of Brazil is 5%

In the following question (Be sure to label all diagrams appropriately for full credit) TYPE answers.

B. Draw a supply and demand diagram of the labor market. Assume that immigration laws are relaxed causing immigrants to flow in to the country. Add to drawing. Label everything.

i. Further, draw a diagram of the production function. Show on the diagrams what will happen to Real GDP as a result of the immigration policy. Show on the production function. Production function should show relationship of labor to output. (Be sure to label the diagram appropriately for full credit).

ii. Explain in words what your diagrams show. Here you will TYPE your explanation of the two curves. Credit for the above two parts will not be given without this inclusion.

C. All at once the technology of the internet and cell phones are introduced to a developing country.

i.Show this impact on the production function. (Draw a before and after on the same graph). Discuss in words (typed).

ii. What will happen to productivity when the new technology is introduced? What do we use to show that productivity has gone up? Explain, in words, what is meant by an increase in productivity.

Explanation / Answer

A. As per rule 70

No of Years to double = 70/Annual Growth

China = 70/8 = 8.75 Years

Brazil = 70/5 = 14 years

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