Country A: Growth rate is 1.4% per year Country B: Growth rate is 2.1% per year...

Question

Question

Country A: Growth rate is 1.4% per year Country B: Growth rate is 2.1% per year Both countries start with 1,000 After a centu

business economics

Answer 1

Answer #1

New GDP=Initial GDP (1+growth rate)¹⁰⁰

New GDP in country A=1000(1.014)¹⁰⁰=4016.016 when economy grows at 1.4%

New GDP in country B=1000(1.021)¹⁰⁰=7990.60

Thus GDP per person is more in country B by $4000

Ans is D

Answer 2

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