This is from the Olivier Blanchard Macroeconomics textbook (5th edition) I\'m su

Question

This is from the Olivier Blanchard Macroeconomics textbook (5th edition)

I'm sure this is basic algebra but I haven't taken algebra in many years and can't for the life of me remember how to solve this. It is as follows:

The average annual growth rate of output per worker in the United States rose from 1.8% during the period 1970 to 1995 to 2.8% for the years 1996-2006. This has led to talk of a New Economy and of sustained higher growth in the future than in the past.

Suppose output per worker grows at 1.8% per year. What will output per worker be--relative to today's level--in 10 years? 20 years? 50 years?

Explanation / Answer

The formula is P= Po (1+r)^t So here O= (1.018)*10 (or 20 or 50)

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.