ECON 302 Midterm: ECON302 Midterm 11 Spring 2009 solution
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Instructions: this is closed book, closed notes exam, no calculators of any kind are allowed, show all the calculations, if you need more space, use the back of the page, fully label all graphs. Suppose that gdp in the u. s. is twice a large as that of china. Also suppose that the u. s. gdp grows at constant rate of 2% per year, while chinese. How many years would it take for china to catch up with the u. s. in terms of gdp? (instructions: since you don"t have calculators, leave the unknown variable t as expression that could be calculated with a calculator). Explanation: china is catching up with the u. s. approximately at 5% per year. Since initially the u. s. gdp is twice as large as that of china, this is a question about doubling time with 5% growth rate. The next table provides data on prices and output in some artificial economy for the years 2000 2001.
