6. (5 points) Country real GDP per real GDP per Average capita 1970capita 7616.8

Question

6. (5 points) Country real GDP per real GDP per Average capita 1970capita 7616.80 1480.77 17726.41 360.63 Years to dou- ble growth 12340.33 1748.11 37103.56 7129.56 1283.67 33705.00 31299.28 25216.40 3477.31 9432.06 26609.15 11939.40 50487.52 2297.05 55862.42 4063.35 41365.00 Source: Penn World Tables 7.1 GDP PPP converted to U.S. dollars, base year 2005 Argentina Cameroon Canada China Cote d'Ivoire 1396.29 Denmark 17680.92 15963.46 12270.64 892.70 8480.23 2808.15 6821.33 17980.07 961.13 7218.39 876.69 France Greece India ran S. Korea Mexico Norway Pakistarn Singapore Sri Lanka United States 20435.85 a. (3 pts) In the "Average growth" column, use the average annual growth rate formula to calculate the average annual growth rate in real GDP for each country over the period 1970 2010 b. (2 pts) Report in the "Years to double" column the number of years it would take for real GDP per capita to double if the economy continued to grow at the 1970 - 2010 rate. Use the rule of 70 If growth is negative, put "NA."

Explanation / Answer

1970 to 2010 = 40 years

Average growth = Growth rate from 1970 to 2010 / 40

Growth rate from 1970 to 2010 = (real GDP in 2010 -real GDP in 1970) / Real GdP in 1970

rule of 70 =70/growth rate

Country real GDP per capita 1970 rel gdp per capita 2010 Grwoth rte from 1970 to 2010 average growth Years to double Argentina   7616.80 12340.33 (12340.33 - 7616.80 )/ 7616.80 = 0.62 0.62/40 = 0.0155 = 1.55% 70/1.55 = 45.16 = 45.2 Cameroon 1480.77 1748.11 0.18 (0.18/40)*100 = 0.45% 70/0.45 = 155.55 Canada 17726.41 37103.56 1.09 2.73% 70/2.73 = 25.6 China 360.63 7129.56 18.76 46.92% 1.49 Cote d'Ivoire 1396.29 1283.67 -0.08 -0.002% NA Denmark 17680.92 33705.00 0.91 2.275% 30.77 France 15963.46 31299.28 0.96 2.40% 29.17 Greece 12270.64 25216.40 1.055 2.6375% 26.5 India 892.70 3477.31 2.895 7.24% 9.67 Iran 8480.23 9432.06 0.11 0.28% 250 S.Korea 2808.15 26609.15 8.48 21.2% 3.3 Mexico 6821.33 11939.40 0.75 1.88% 37.2 Norway 17980.07 50487.52 1.8 4.5% 15.55 Pakistan 961.13 2297.05 1.39 3.47% 20.17 Singapore 7218.39 55862.42 6.74 16.85% 4.15 Sri Lanka 876.69 4063.35 3.63 9.09 7.7 United states 20435.85 41365.00 1.024 2.56 27.34

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