1) On January 1, 2023, the capital stock in the economy of a country was valued at $975 billion. Over the year, gross investment totalling $125 billion occurred. On December 31, 2023, the market value of all the capital stock was $1,030 billion. For 1 mark each,

a) what was the gross investment in 2023? ______________.

b) what was the amount of depreciation in 2023? _______________.

c) what was the net investment in 2023? _______________.

2) For 2020, the imaginary country of Laffonia had a real GDP of $10.7 billion, and a population of 312,000. For 2021, the real GDP was $11.5 billion, and the population was 324,000.

What was Laffonia's growth rate in real GDP per capita between 2020 and 2021? (2 marks) _____________ (indicate whether it is positive or negative)

a) Gross investment in 2023 can be calculated by subtracting the initial capital stock from the market value of all capital stock at the end of the year: Gross investment = Market value of all capital stock at the end of 2023 - Initial capital stock = $1,030 billion - $975 billion = %55 billion b} Depreciation in 2023 can be calculated by subtracting the net investment from the gross investment: Depreciation = Gross invastment - Net investment = $125 billion - 355 billion = %70 billion c) Met investment in 2023 is the increase in the capital stock after accounting for depreciation: Met investment = Gross investment - Depreciation = $125 billion - $70 billion = %55 billion 1. To calculate the growth rate in real GDP per capita between 2020 and 2021 for Laffonia, we first need to calculate the real GDP per capita for both years: Real GDP per capita for 2020 = Real GDP / Population = $10.7 billion / 312,000 Real GDP per capita for 2020 = $34,294.87 Real GDP per capita for 2021 = Real GDP / Population = $11.5 billion / 324,000 Real GDP per capita for 2021 = $35,493.83 Now, we can calculate the growth rate: Growth rate = ((Real GDP per capita for 2021 - Real GDP per capita for 2020) / Real GDP per capita for 2020) * 100% = (($35,493.83 - $34,294.87) / $34,294.87) *100% = (0.0349645 / 34294.87) * 100% = 0.00102 * 100% = 0.102%So, the growth rate in real GDP per capita between 2020 and 2021 for Laffonia is approximately 0.102%, which is positive