CHAPTER 10 (22)
Long-Run Economic Growth: Sources andPolicies
1.4Growth RatesCountry2003200420052006AverageAnnualGrowth Rate
Australia2.67%2.80%2.41%2.63%Hungary4.984.223.884.36Poland5.263.286.104.88a. During 2004, Poland experienced the highest economic growth rate of 5.26%. b. During 2005, Hungary experienced the highest economic growth rate of 4.22%.c. Between 2004 and 2006, Poland experienced the highest average annual growth rate of 4.88%.
You will have earned more on your Lowell Bank CDs.
BankValue of CD at end of year200720082009
Andover Bank$1,020.00$1,111.80$1,222.98Lowell Bank$1,070.00$1,144.90$1,225.04
1.6YearReal GDP per capita(2000 prices)Annualgrowth rate
2002$34,861200335,3851.50%200436,4152.91200537,2412.27200638,1542.45a.The percentage increase in real GDP per capita between 2002 and 2006 was
− × =
b. The average annual growth rate in GDP per capita between 2002 and 2006 can be measuredas the average of the annual growth rates in the above table, which is 2.28%.
The answer depends on several factors: Whether country A sustains high rates of growth relativeto country B, on how long a period of time has passed since rapid economic growth first began in countryA, and on how long a period of time there was between rapid economic growth beginning in country Aand rapid economic growth beginning in country B. For example, the standard of living in China cancatch up with that in Japan if China continues to sustain an economic growth rate that is higher than thegrowth rate in Japan.