Please some help! AP macro economics
Country Y
(f) Country Y has a real GDP per capita of $75, and it has a population of 2 million. Calculate Country Y's real GDP.
(g) Four years later, the GDP per capita of Country Y is $90. Assume there has been no technological advancement and no increase in physical capital in that time period. Identify a policy that could lead to this increase.
(h) Calculate the economic growth rate for Country Y over the time period described in part (g). Show your work.
Final answer:
Country Y's real GDP is calculated at $150,000,000, and the growth in GDP per capita over four years can be attributed to improved labor productivity. The economic growth rate for Country Y is 20% during this period.
Explanation:
Country Y has a real GDP per capita of $75, and with a population of 2 million, its real GDP is calculated by multiplying the per capita amount by the population. This results in a real GDP of $150,000,000 (75 * 2,000,000).
After four years, the GDP per capita increases to $90 without technological advancement or an increase in physical capital. This could indicate a policy that focused on improving labor productivity, such as education and healthcare enhancements, to raise the efficiency and effectiveness of the workforce. To calculate the economic growth rate over the period described, use the formula: Growth Rate = ((Final GDP per capita - Initial GDP per capita) / Initial GDP per capita) * 100. Substituting the given values: Growth Rate = (($90 - $75) / $75) * 100 = 20%.
Please explain the process of calculating Country Y's real GDP and the policy that could lead to an increase in GDP per capita without technological advancement or physical capital increase. To calculate Country Y's real GDP, you multiply the real GDP per capita of $75 by the population of 2 million, resulting in a real GDP of $150,000,000. A policy that could lead to an increase in GDP per capita without technological advancement or physical capital increase is focusing on improving labor productivity through initiatives like education and healthcare enhancements to enhance the workforce's efficiency and effectiveness.