Questions

1. Suppose society decided to reduce consumption and increase investment: a. How would this change affect economic growth? b. Which groups in society would benefit from this change? Which groups may be hurt? 2. How large will Canada's GDP be in 25 years? The answer depends on what the rate of growth is. A mathematical formula we can use for this calculation is the following: GDP2046 = GDF'2021(1 + 8)25 Where GDP2021 is the level of of GDP in the year 2021, and g is the growth rate. Calculate what the GDP will be in 2046 if the growth rate is 2% (average Western world growth rate)? If the growth rate is 3.5%? If the growth rate is 4%? Assume GDP in Canada in 2021 is $1.9T. What do these results say about the importance of government policies that promote even slightly faster rates of growth in GDP