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How do I solve this?
https://ne connect.mheducation.com ow connect.html? retur Urls https%3A%2F%2Fconnect h education cor o Fpaamweb%2Findex.html%23%2Fr m Z. #2 (Ch 2) 0 Saved Help Save & Exit Submit Check my work Answer the following questions. Instructions: In part a, enter your response rounded to one decimal place. In part b, enter your response rounded to the nearest dollar a. Using data from 2015, how much more output does the $650 billion economy in Saudi Arabia produce when GDP increases by 1 percent? billion b. Using data from 2015, by how much does this increase per capita income if the population is 32 million?Explanation / Answer
The intitial GDP is given as $ 650 billion and the rate of growth is 1%. Therefore the new GDP after taking into account the 1% growth is $(650 + 1% of 650) billion = $(650 + 6.5) = $656.5 billion
Therefore, the increase in output = $(656.5 - $650) = $6.5 billion
a. Therefore, $6.5 billion worth of more oputput is produced by the economy. Since, $6.5 is already rounded to one decimal place (has one digit after the decimal point), the answer to part a. is $6.5.
b. Per capita income is given by dividing the GDP by the total population.
Before increase in GDP, the per capita GDP = ($650 billion) / 32 million ...(1)
I million = 1 billion/1000
32 million = 32 billion/1000 = 0.032 billion ....(2)
Replacing (2) in (1), we get,
Percapita GDP before increase = $650 billion / 0.032 billion = $ 20312.5 per capita
After increase in GDP by 1%, it rises to $656.5 billion
Therefore, per capita GDP after increase = $656.5 billion/ 0.032 billion = $20515.625
Increase in per capita income = $20515.625 - $20312.5 = $203.125
Rounding the incraese in per capita GDP to the nearest dollar, we find that the increase in per capita GDP is $203.
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