10 POINTS 3 Calculate the actual average growth rates during

(10 POINTS) 3. Calculate the actual average growth rates during these two periods, 1870-1929 and 1950-2012. And interpret it. Year 1870 1929 1950 2012 U.S. income $2,840 $8,020 $13,225 $43,238 (10 POINTS) 4. Suppose x, (1.05) and (1.03. Calculate the growth rate of ry And interpret it. (10 POINTS) 5. Assume that per capita GDP in the year 2015 is equal to $10,000. Per capita GDP grows at 5% per year for 50 years and then slow down to 2% per year for the next 100 years. Plot the above scenario for capita GDP on a ratio scale. Use the Rule of 70 to label the value of per capita GDP on the graph.

Solution

SOLUTION-3)

Solution:

Year

U.S Income

Growth rate of real GDP

1870

2840

100

1929

8020

182.39

1950

13225

100.00

2012

43238

226.94

?

Average actual growth rate:

1870 - 1929: 141.19

1950-2012: 163.47

The average actual growth rate has increased by 22.27%

Year	U.S Income	Growth rate of real GDP
1870	2840	100
1929	8020	182.39
1950	13225	100.00
2012	43238	226.94