Question

The median growth rate of per capita real GOP in New Brunswick is higher than in Aberta househoid income in New Brunswick is approximitely $65.910 per yee year, while the median household income in Alberta is e about $94,460. However, suppose the ss 2%) perspective of trying to miaximize your income per capita, which state wil have higher increases in income over the next few yeers? OAlberta, because incomes are rising slower New Brunswick, because the lower income means the cost of living is loss Alberta, because income is aiready higher New Brunswick, because the growth rate is highe b. From the perspective of trying to maximize your income per capita, which state will have higher increases in income in the long run? Alberta, because incomes ane higher now Alberta, because the growth rate is lower, so the cost of living is lower New Brunswick, because the cost of living is lower Now Brunswick, because the higher growth rate will lead to higher incomes in the long nun

Answer 1

Per capita income in Alberta is higher than the per capita income in New Burnswick.

However, growth rate of per capita income is higher in New Burnswick than Alberta.

So, in short-run, Alberta will experience higher increase in per capita income as its per capita income is already higher.

On the other hand, in long-run, New Burnswick will experience higher increase in income as its growth rate of per capita income is higher than Alberta.

So,

(a)

From the perspective of trying to maximize your income per capita, Alberta will have higher increases in income over the next few years.

Hence, the correct answer is the option (3).

(b)

From the perspective of trying to maximize your income per capita, New Burnswick will have higher increases in income in the long-run.

Hence, the correct answer is the option (4).