contestada

Assume that a "leader country" has real gdp per capita of $40,000, whereas a "follower country" has real gdp per capita of $20,000. next suppose that the growth of real gdp per capita falls to zero percent in the leader country and rises to 5 percent in the follower country. instructions: enter your answer as a whole number. if these rates continue for long periods of time, how many years will it take for the follower country to catch up to the living standard of the leader country? years.

Respuesta :

The “Rule of 70,” which is to divide 70 by the rate of growth, gives us the time it takes for a country to double its output.
Years to double = (70 / Rate of Growth)
Since the rate of growth for real GDP per capita is 5% in the follower country, the country's real GDP per capita will double every 14 years. 
Years to double = (70 / 5)=14

So, in 14 years the follower country's real GDP per capita will be $40,000 given its current level of $20,000.
The rate of growth for real GDP per capita in the leader country is 0% (no growth). 

Thus,it will remain at $40,000 real GDP per capita. Combining the two results above, it will take 14 years for the follower country to catch-up with the leader country.

Otras preguntas