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Problems

# Problems

35.

An economy starts off with a GDP per capita of $5,000. How large will the GDP per capita be if it grows at an annual rate of two percent for 20 years? Two percent for 40 years? Four percent for 40 years? Six percent for 40 years? 36. An economy starts off with a GDP per capita of 12,000 euros. How large will the GDP per capita be if it grows at an annual rate of three percent for 10 years? Three percent for 30 years? Six percent for 30 years? 37. Say that the average worker in Canada has a productivity level of$30 per hour while the average worker in the United Kingdom has a productivity level of \$25 per hour; both are measured in U.S. dollars. Over the next five years, say that worker productivity in Canada grows at one percent per year, while worker productivity in the UK grows three percent per year. After five years, who will have the higher productivity level and by how much?

38.

Say that the average worker in the U.S. economy is eight times as productive as an average worker in Mexico. If the productivity of U.S. workers grows at two percent for 25 years, and the productivity of Mexico’s workers grows at six percent for 25 years, which country will have higher worker productivity at that point?