Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Adeveloping country has determined that each additional $1 billion of investment in capital goods adds 0.3 percentage point to its longwrun average annual rate of

image text in transcribed
image text in transcribed
Adeveloping country has determined that each additional $1 billion of investment in capital goods adds 0.3 percentage point to its longwrun average annual rate of growth of per capita real GDP. Domestic entrepreneurs recently began to seek official approval to open a range of businesses employing capital resources valued at $30 billion. It the entrepreneurs undertake these investments. and assuming that other things are equal. calculate the nation's long-run average annual rate of growth of per capita real GDP up to a fraction of a percentage point. a percent. (Round your answer to one decimai place.) After weeks of effort trying to complete the first of 15 stages of bureaucratic red tape necessary to obtain authorization to start their businesses. a number of entrepreneurs decide to drop their investment plans completely. and the amount of official investment that actually takes place turns out to be $5 billion. Dther things being equal, by what fraction ofa percentage point will this decision reduce the nation's long-run average annual rate of growth of per capita real GDP from what it would have been if investment had been $30 billion? D percent. (Round your answer to one decimai piece}I

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Economics A Problem Solving Approach

Authors: Luke M. Froeb, Brian T. McCann

1st Edition

0324359810, 9780324359817

More Books

Students also viewed these Economics questions

Question

Explain the need for and importance of co-ordination?

Answered: 1 week ago

Question

Explain the contribution of Peter F. Drucker to Management .

Answered: 1 week ago

Question

What is meant by organisational theory ?

Answered: 1 week ago

Question

What is meant by decentralisation of authority ?

Answered: 1 week ago

Question

5. How can I help others in the network achieve their goals?

Answered: 1 week ago