Homework Sourse1 Economic growth around the world The following table repor
1. Economic growth around the world
The following table reports real income per person for several different economies in the years 1960 and 2010. It also gives each economy\'s average annual growth rate during this period. For example, real income per person in Madagascar was $1,223 in 1960, and it actually declined to $789 by 2010. Madagascar\'s average annual growth rate during this period was -0.87%, and it was the poorest economy in the table in the year 2010.
The real income-per-person figures are denominated in U.S. dollars with a base year of 2005. The following exercises will help you to understand the different growth experiences of these economies.
Indicate which economy satisfies each of the following statements.
Statement
Indonesia
Madagascar
New Zealand
Sri Lanka
Taiwan
United States
This economy had the highest level of real income per person in the year 2010.
Consider the following list of four countries. Which economy began with a level of real income per person in 1960 that was well below that of New Zealand and grew fast enough to catch up with and surpass New Zealand\'s real income per person by 2010?
Madagascar
Sri Lanka
Taiwan
United States
| Economy | Real Income per Person in 1960 | Real Income per Person in 2010 | Annual Growth Rate |
|---|---|---|---|
| (Dollars) | (Dollars) | (Percent) | |
| United States | 15,136 | 41,858 | 2.06 |
| New Zealand | 12,868 | 24,397 | 1.29 |
| Indonesia | 744 | 3,993 | 3.42 |
| Taiwan | 2,061 | 32,865 | 5.69 |
| Sri Lanka | 790 | 4,047 | 3.32 |
| Madagascar | 1,223 | 789 | -0.87 |
Solution
Correct Answer:
Statement 1: Taiwan
(It registered the fastest growth rate in real income per person that was 1494.61% between 1960 and 210)
Statement 2: United States
(It has the highest level of real income per person in 2010 as depicted from the table)
Correct Answer:
Taiwan
It is the Taiwan country that had real income per person lower than New Zealand in 1960, but it was higher in 2010.
| Economy | Real Income per Person in 1960 | Real Income per Person in 2010 | Annual Growth Rate | Growth rate in real income per person From 1960 to 2010 |
| (Dollars) | (Dollars) | (Percent) | (Percent) | |
| United States | 15,136 | 41,858 | 2.06 | 176.55 |
| New Zealand | 12,868 | 24,397 | 1.29 | 89.59 |
| Indonesia | 744 | 3,993 | 3.42 | 436.69 |
| Taiwan | 2,061 | 32,865 | 5.69 | 1494.61 |
| Sri Lanka | 790 | 4,047 | 3.32 | 412.28 |
| Madagascar | 1,223 | 789 | -0.87 | -35.49 |
