Question
Consider the following table of long run trend growth rates of nominal GDP and population, along with the long run average inflation rate, for four
Consider the following table of long run trend growth rates of nominal GDP and population, along with the long run average inflation rate, for four fictional countries:
Country________g(NGDP)____Inflation_Rate______g(POPULATION)__
Westeros 6% 3% 1%
Pentos 4% 0% 1%
Lys 10% 6% 2%
Qarth 9% 5% 3%
(a) Suppose these countries currently have identical living standards. Assuming the trends shown above continue indefinitely, which country will eventually have the highest living standards, and which will have the lowest?
(b) How many years will it take living standards to quadruple (rise by a factor of four) in Westeros?
(c) Suppose a sword costs 100 in Lys today. How much will it cost in 70 years?
(d) Suppose Qarth and Pentos currently have identical living standards. In 70 years, how much better off will people be in Qarth, compared to Pentos?
please answer a b c d ASAP
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