Suppose real GDPs in country A and country B are identical at $10 trillion dollars in 2005. Suppose country A’s economic growth rate is 2% and country B’s is 4% and both growth rates remain constant over time.

a. On a graph, show country A’s potential output until 2025.

b. On the same graph, show country B’s potential output.

c. Calculate the percentage difference in their levels of potential output in 2025.

Suppose country A’s population grows 1% per year and country B’s population grows 3% per year.

a. On a graph, show country A’s potential output per capita in 2025.

b. On the same graph, show country B’s potential output per capita in 2025.

c. Calculate the percentage difference in their levels of potential output per capita in 2025. L987