The rate of economic growth per capita in France from 1996 to 2000 was 1.9% per
ID: 1191016 • Letter: T
Question
The rate of economic growth per capita in France from 1996 to 2000 was 1.9% per year, while in Korea over the same period it was 4.2%. Per capita real GDP was $28,900 in France in 2003, and $12,700 in Korea. Assume the growth rates for each country remain the same. 1. Compute the doubling time for France’s per capita real GDP. 2. Compute the doubling time for Korea’s per capita real GDP. 3. What will France’s per capita real GDP be in 2045? 4. What will Korea’s per capita real GDP be in 2045? The rate of economic growth per capita in France from 1996 to 2000 was 1.9% per year, while in Korea over the same period it was 4.2%. Per capita real GDP was $28,900 in France in 2003, and $12,700 in Korea. Assume the growth rates for each country remain the same. 1. Compute the doubling time for France’s per capita real GDP. 2. Compute the doubling time for Korea’s per capita real GDP. 3. What will France’s per capita real GDP be in 2045? 4. What will Korea’s per capita real GDP be in 2045? The rate of economic growth per capita in France from 1996 to 2000 was 1.9% per year, while in Korea over the same period it was 4.2%. Per capita real GDP was $28,900 in France in 2003, and $12,700 in Korea. Assume the growth rates for each country remain the same. 1. Compute the doubling time for France’s per capita real GDP. 2. Compute the doubling time for Korea’s per capita real GDP. 3. What will France’s per capita real GDP be in 2045? 4. What will Korea’s per capita real GDP be in 2045?Explanation / Answer
The rate of economic growth per capita in France from 1996 to 2000 was 1.9% per year, while in Korea over the same period it was 4.2%. Per capita real GDP was $28,900 in France in 2003, and $12,700 in Korea.
We use the rule of 70:
The rule of 70 is a way to estimate the number of years it takes for a certain variable to double. To estimate the number of years for a variable to double, take the number 70 and divide it by the growth rate of the variable. This rule is commonly used with an annual compound interest rate to quickly determine how long it takes to double your money.
The doubling time for France per capita real GDP is 70/1.9 = 36.8 years, so France's GDP will double in 2040.
The doubling time for Korea per capita real GDP is 70/4.2 = 16.7 years, so France's GDP will double in 2020.
France per capita real GDP in 2045 will be 28,900*1.019^42 = $63,710.88
Korea's per capita real GDP in 2045 will be 12,700*1.042^42 = $71490.43
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.