Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Consider the following table for a hypothetical economy in which the initial level of GDP (Y 0 ) in all cases is 1000. Assume that
Consider the following table for a hypothetical economy in which the initial level of GDP (Y0) in all cases is 1000. Assume that real GDP grows according to the equation Y0(1 + growth rate)N, where N is the number of years in the future. Numbers are rounded to the nearest whole number.
Real GDP with Alternative Growth Rates |
Year | 1% | 2% | 3% | 4% |
0 | 1000 | 1000 | 1000 | 1000 |
1 | 1010 | |||
5 | ||||
20 | ||||
50 |
TABLE 25-1 Note: This question requires a calculator with an exponent function. Refer to Table 25-1. If this economy is growing at an annual rate of 2%, then real GDP in Year 50 will be
Select one:
a. 500.
b. 1126.
c. 2692.
d. 51 000.
e. 1645.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started