1. Economic growth around the world The following table shows levels of real income per person in several economies during the years 1960 and 2010. The table further shows the average annual growth rate for each economy over this time period. For instance, real income per person in the Central African Republic was $1,010 in 1960, and it actually declined to $628 by 2010. The Central African Republic's average annual growth rate during this period was -0.95%, and it featured the lowest level of real income per person of any economy listed in the table in the year 2010. The levels of real income per person are reported in U.S. dollars using a base year of 2005. The following exercises will provide insight into the different growth experiences of these nations. Real Income per Person in 1960 Real Income per Person in 2010 Annual Growth Rate Economy (Dollars) (Dollars) (Percent) Australia 13,817 37,338 2.01 Finland 8,837 31,601 2.58 Thailand 772 8,467 4.91 Ireland 7,807 41,558 3.40 Pakistan 717 2,477 2.51 Central African Republic 1,010 628 -U.95 Indicate which economy satises each of the following statements. Central African Statement Australia Republic Finland Ireland Pakistan Thailand This economy had the highest level of real income per person in the year 2010. This economy experienced the fastest rate of growth in real income per person from 1960 to 2010. Consider the following four nations listed below. Which economy started 1960 with a level of real income per person of below that of Finland and grew fast enough to catch up with and surpass Finland's real income per person by 2010? Australia Central African Republic Ireland Thailand Attempts |:|:|:| Keep the Highest I 1 2. The determinants of productivity Suppose there is a simple hypothetical economy in which the only industry is cloud computing. In the cloud computing field, productivitythe amount of goods and services a worker can produce per houris measured by the number of lines of code one programmer authors per hour. In the following table, select the appropriate productivlty determinant that represents each example. Human Capital Natural Resources Physical Capital Technological Examples per Worker per Worker per Worker Knowledge An autocomplete plug-in that allows programmers to write code more rapidly The server hardware on which data is stored The additional education workers receive from new computer science course offerings The rare earth metals that serve as inputs to production of computers Continue without saving Keep the Highest / 3 3. Productivity and growth policies Consider a hypothetical small island nation in which the only industry is cloud computing. The following table displays information about the economy over a two year period. Complete the table by calculating physical capital per worker as well as labor productlvlty. Hint: Recall that productivity is dened as the amount of goods and services a worker can produce per hour. In this problem, measure productivity as the quantity of goods per hour of labor. Physical Labor Physical Capital per Labor Capital Force Worker Hours Output (Servers) (Workers) (Servers) (Hours) (TB of data Year storage) 2027 160 40 1,800 14,400 2028 180 60 3,900 23,400 Based on your calculations, productivity from 2027 to 2028. Suppose you're in charge of establishing economic policy for this small island country. V in physical capital per worker from 2027 to 2028 is associated with Labor Productivity (TB of data storage per hour of labor) V in labor Which of the following policies would lead to greater productivity in the cloud computing industry? Check all that apply. Sharply increasing the interest rate on student loans to people pursuing advanced degrees in cloud computing Encouraging saving by allowing workers to set aside a portion of their earnings in tax-free retirement accounts Imposing restrictions on foreign ownership of domestic capital Imposing a tax on servers Grade It Now Save & Continue Continue without saving