3. (4 points) The questions below ask you to fill in values on the table. real G

Question

3. (4 points) The questions below ask you to fill in values on the table. real GDP per capita capital per personk1/3 Country USA Canada norm y norm A 42,887 36,168 29.633 Hong Kong43,121 South Korea 23,850 5,186 Argentina15,275 11,204 2,025 1,110 1.00 135,877 116,188 109,023 123,268 104,864 9,957 35,182 33,168 2,379 584 1.00 1.00 France Indonesia Mexico Kenva Ethiopia Alternatively, you can download the file cross_country_real_GDP.xlsx from blackboard and turn in the excel spreadsheet a. (1 pt) Suppose k represents capital per person. Find ks for each country and report in the table b. (1 pt) In the column k3, calculate the values forrelative to the United States. Hint:The value for the United States should be 1 c. (2 pts) In column Y norm, create a series of real GDP per capita relative to the United States. How well does the simple model do at predicting real GDP per capita relative to the United State? Is the series k generally higher or lower than the actual, y norm series? d. (2 pts)For each country, find the value of A that results in the model exactly matching the level of y norm for each country. Hint: The value for the United States should be 1

Explanation / Answer

Yes, Y norm is generally lower than K norm.

Country Real GDP Per Capita capital per person K1/3 K1/3 norm y norm A US 42883 135877 51.410 1.0 1.00 1.00 Canada 36168 116188 48.79 0.94 0.84 France 29633 109023 47.77 0.92 0.69 Hong Kong 43121 123268 49.76 0.967 1.005 South Korea 23850 104864 47.156 0.917 0.55 Indonesia 5186 9957 21.51 0.418 0.12 Argentina 15275 35182 32.76 0.63 0.35 Mexico 11204 33168 32.129 0.624 0.26 Kenya 2025 2379 13.349 0.259 0.047 Ethiopia 1110 584 8.35 0.162 0.025

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