LO 3 Consider the following data on the population and the real GDP of the economies of the Four Asian Dragons.

(a) Calculate the real GDP per capita for each economy.

(b) Calculate the annual growth rates of real GDP per capita (in percentage) from 2011 to 2014.

(c) Take the natural logarithm of the per capita real GDP and apply the approximation rule ln (1 + x) ≈ x to calculate the annual growth rates (in percentage) from 2011 to 2014. Compare the results to your answer to part (b).

(d) Calculate the accumulative growth rate and the average growth rate of real GDP per capita between 1960 and 2014.

(e) Apply the log approximation rule to calculate the accumulative growth rate and the average growth rate between 1960 and 2014, and compare the results to your answer to part (d). What is the implication of using two different measures to compute the growth rates?

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Year Hong Kong Singapore South Korea Taiwan Population (in 1960 3.07 1.65 24.17 10.67 millions) 2010 6.99 5.08 49.09 23.14 2011 7.04 5.19 49.36 23.19 2012 7.10 5.30 49.61 23.27 2013 7.16 5.41 49.85 23.34 2014 7.23 5.51 50.07 23.43 Real GDP at 1960 13,298.78 7,192.27 38,941.16 22,064.72 Constant Na- 2010 299,296.00 301,416.44 1,534,068.00 861,682.13 tional Prices 2011 313,706.13 320,127.28 1,590,547.63 894,465.25 (in millions of 2011 U.S. 2012 319,040.06 331,056.81 1,627,009.38 912.924.81 dollars) 2013 328,841.53 345,766.66 1,674,130.88 933,031.44 2014 337,066.66 355,857.50 1,729,547.25 969,652.31