Question

Inbox - [email protected] - Gmail Online Courses & Organizations my.ryerson por... Assignment non prach Definition Assignment #1 Saved Help Save & Exit Submit 14 Refer to the figure below and assume that the values for points a, b, and care $10 billion, $20 billion, and $14 billion respectively. 0 The Macroeconomy PPF Capital Goods Consumer Goods Instructions: Round your answers below to whole numbers. If the economy moves from point a to point bover a 2-year period, what must have been its annual rate of economic growth? Rate of growth = 0 % < Prev 14 of 30 Next >

Answer 1

Rate of growth = (present/past)^(1/n) - 1

Present value = $20 billions

Past value = $10 billions

n = time period = 2

Rate of growth = ($20 billions/$10 billions)^(1/2) - 1

Or, Rate of growth = 0.414 = 41.4% = 41% (approx)

Answer: 41%